Latest / SliderCuts This Is Ownership Podcast / HOW I MADE A MILLION BUT I’M STILL BROKE

Transcript

HOW I MADE A MILLION BUT I’M STILL BROKE · SliderCuts This Is Ownership Podcast

• 0:00
  SPEAKER_00: Last week I told people that I am broke and the video went all over.
• 0:06
  SPEAKER_00: I had people messaging me, I had voice notes from people, some people just who run their own businesses just saying, Yo, oh thank you for that, man.
• 0:14
  SPEAKER_00: People don't understand.
• 0:15
  SPEAKER_00: People telling me about the figures they bought in, saying, Look, I've bought in millions and I haven't seen a penny because of this, because of that, and people being encouraging, and other people in comments saying things like, you know, he's just saying it because you know the tax man's watching, or he's just running business bad then, or people asking the question, How can that be?
• 0:31
  SPEAKER_00: How can you owe that much money or not be making that much money, even though this much money is coming in?
• 0:36
  SPEAKER_00: You said that the business grossed a million, but you're broke, you're you're chatting rubbish.
• 0:43
  SPEAKER_00: There were so many different comments, right?
• 0:45
  SPEAKER_00: From people backlash to people in support to people being like, yo, I understand what you're saying, to other people being like, I don't understand.
• 0:53
  SPEAKER_00: So I thought let me just break it down to you a little bit more today.
• 0:57
  SPEAKER_00: And if you don't know who I am already, my name is Mark McIver, and this is the slider cuts, schooled by owners podcast, which is the name which I think I'm going with.
• 1:07
  SPEAKER_00: What do you guys think?
• 1:08
  SPEAKER_00: Schooled by owners or school of owners?
• 1:12
  SPEAKER_00: Which one do you like better?
• 1:13
  SPEAKER_00: Whichever one you like, let me know in the comments.
• 1:16
  SPEAKER_00: But this is the podcast where I talk all things barbering, business, and in between.
• 1:24
  SPEAKER_00: And today I'm gonna explain to you guys in a bit more depth and just focus on a few of the comments.
• 1:31
  SPEAKER_00: Why am I broke or how can I be broke if the business brought in a million pounds?
• 1:37
  SPEAKER_00: Well, first of all, the business bought in a million pounds.
• 1:44
  SPEAKER_00: That means that the money that was made throughout the shop from all the barbers cutting hair was that much.
• 1:50
  SPEAKER_00: That's not what Mark MacIver took home.
• 1:54
  SPEAKER_00: That's what the business took home.
• 1:55
  SPEAKER_00: And what a lot of people don't understand as well is in barbering, probably hairdressing, the beauty world, to be honest, it's one of the few industries where the people that work, the staff members, actually take home in a lot of cases a higher percentage than the actual shop.
• 2:13
  SPEAKER_00: If you look at other businesses, like, and some of these figures might be off a little bit, but you'll get the gist of what I'm saying.
• 2:20
  SPEAKER_00: If you look at other businesses like tech companies, I think under 5% goes to the staff.
• 2:27
  SPEAKER_00: If you look at just any, if you just go online and type in what you call it, the split of what do staff get in different businesses, different industries, you'll see that in most industries, the staff take home less.
• 2:42
  SPEAKER_00: But in the barber industry, in a lot of cases, the staff take home equal to more.
• 2:50
  SPEAKER_00: So when I say things like in most barber shops when they do percentage splits, it generally is in most cases between 60 to 40 percent, either way.
• 3:01
  SPEAKER_00: Some shops will take the higher percentage, basically being the more that the shop does for you, the more they take.
• 3:07
  SPEAKER_00: But in a lot of cases, I've heard between 50 to 60, 40, 50-50 to 60-40, where the shop may take less, right?
• 3:17
  SPEAKER_00: So the staff take home more.
• 3:18
  SPEAKER_00: So when you look at it like that, first of all, when you do figures of like, okay, well, the business bought in a million pounds, well, first of all, the staff would take home the higher percentage in that case.
• 3:30
  SPEAKER_00: And then in my business, we've got back-end staff.
• 3:33
  SPEAKER_00: Like there's a lot of people which are involved in making sure this operation runs smoothly.
• 3:37
  SPEAKER_00: So when you call Slidercut Studios and someone picks up, someone's getting paid to do that.
• 3:41
  SPEAKER_00: When you email and someone responds back to you, someone's being paid to do that.
• 3:45
  SPEAKER_00: Making sure that we got all these platforms up, you know, just all these things up, right?
• 3:50
  SPEAKER_00: We have helpers all around.
• 3:51
  SPEAKER_00: Somebody is being paid to do that.
• 3:53
  SPEAKER_00: When you go online to slidercuts.com and you click on book now, someone gets paid to make sure that our website runs efficiently and it's constantly, you know, working.
• 4:02
  SPEAKER_00: When plugins stop working, someone gets paid to make sure the plugins are still working.
• 4:06
  SPEAKER_00: Basically, to run a smooth operation, people are being paid.
• 4:12
  SPEAKER_00: So, first of all, we have the barbers that are getting paid and they're taking home the higher percentage, right?
• 4:17
  SPEAKER_00: And then we have back-end staff, staff working Monday to Saturday in the the receptionists.
• 4:24
  SPEAKER_00: We have PA, we have bookkeepers.
• 4:29
  SPEAKER_00: Now, I'm not gonna go into all the figures.
• 4:31
  SPEAKER_00: Maybe in another episode I'll talk about that, the figures, but like my accountants, they're not cheap, they are not cheap, but they are good.
• 4:43
  SPEAKER_00: Like I remember I put something out on Instagram before where I was just showing a rundown of the things you may have to pay or the things you have to pay when it comes to running a barber shop.
• 4:51
  SPEAKER_00: And one of the things I put down there was accounting fees, right?
• 4:54
  SPEAKER_00: And I just put down figures, you know, just and the whole point of this was that you should put in your own figures, but I'm putting in loose figures, like I put in internet, like 70 pounds.
• 5:03
  SPEAKER_00: People were messaging saying that's ridiculous.
• 5:05
  SPEAKER_00: How can you pay that much for internet?
• 5:06
  SPEAKER_00: I'm like, Well, that's how much I pay.
• 5:08
  SPEAKER_00: You don't have to pay that much, you can go find a cheaper internet, but I pay that because I want the best internet in the shop for the staff to use and the clients to use.
• 5:15
  SPEAKER_00: I put down the figure of a thousand pounds for accountant.
• 5:19
  SPEAKER_00: A lot of people were like almost like it was backlash.
• 5:23
  SPEAKER_00: Like, how can you pay that much?
• 5:24
  SPEAKER_00: You're getting ripped off, you're getting bumped, that's too much, this and that.
• 5:27
  SPEAKER_00: My accountant charges me this, my accountant charges me that.
• 5:29
  SPEAKER_00: And it's like, you know what?
• 5:32
  SPEAKER_00: You can put in the figure you want to put in there.
• 5:34
  SPEAKER_00: It's fine.
• 5:36
  SPEAKER_00: I'm not telling you to do that.
• 5:37
  SPEAKER_00: This is what I and to be honest, what's funny is actually, this is not even what I pay.
• 5:42
  SPEAKER_00: If I'd be honest, I actually pay more than that.
• 5:45
  SPEAKER_00: I pay more than that.
• 5:46
  SPEAKER_00: Yes, my accountants aren't cheap, but they are good because the money they've saved me in the last year.
• 5:53
  SPEAKER_00: So if I'm gonna be real with you, like let's just be real.
• 5:56
  SPEAKER_00: This podcast is all about being real.
• 5:58
  SPEAKER_00: So let's put out real figures out there.
• 6:00
  SPEAKER_00: I'm paying my accountants about mate, hopefully they're not, hopefully, you guys aren't aren't unhappy about this, me putting it out there, but altogether, I've got different businesses from my media business, which is to do with everything like influencer and stuff like that, to me as an individual cutting hair, to the barbershop, Slidercut Studios.
• 6:20
  SPEAKER_00: So they manage all three, and I pay probably about altogether, about 2,000.
• 6:29
  SPEAKER_00: No, actually, because they've taken on more responsibilities recently to their my in-house bookkeepers now as well, so they make the payments to the staff and so on.
• 6:35
  SPEAKER_00: So I'm paying probably about 2,500 to 2,700 a month, maybe more to 2,500, something like that, right?
• 6:45
  SPEAKER_00: And lots of you listening and watching will be like, what?
• 6:48
  SPEAKER_00: That's too much.
• 6:49
  SPEAKER_00: You're getting ripped off, you're getting bumped.
• 6:51
  SPEAKER_00: How about you find out the value they give to me?
• 6:55
  SPEAKER_00: Because it's easy to say you're getting ripped off.
• 6:59
  SPEAKER_00: Do you know what they save me?
• 7:01
  SPEAKER_00: And since we're talking real figures and this podcast is all about being honest and real, in off the top of my head, straight away when I signed up to them, they done some things where they saved me 60,000 pounds a year in taxes, legitimately.
• 7:17
  SPEAKER_00: Just save me.
• 7:18
  SPEAKER_00: Because just some things that just weren't being put through that should have been put, just they saved me legitimately.
• 7:24
  SPEAKER_00: Like, so this is not like kind of thing of like, oh, they did something under the hand underhand.
• 7:27
  SPEAKER_00: No, because even when I signed up to them, my whole thing with them was listen, I want to save on taxes where I can, but I don't want to do anything illegal at all or anything underhanded, just what I can do.
• 7:39
  SPEAKER_00: And they said, Yeah, you know, that's us.
• 7:41
  SPEAKER_00: Like, you know, we'll help you with that, and we're not gonna do anything illegal or anything like that.
• 7:45
  SPEAKER_00: I said, Cool, if you guys can save me money, cool.
• 7:47
  SPEAKER_00: I don't mind paying out people because what you'll find in life is a lot of times the people you pay more to, not in every case, but a lot of times when you pay people more or people which are valued higher, it's because they actually give more, they are actually genuine valued higher, so they charge more.
• 8:01
  SPEAKER_00: Those which are specialists in things that they know how good they are, they charge more because they know how good they are.
• 8:06
  SPEAKER_00: The accountant firm I'm with are good.
• 8:08
  SPEAKER_00: So they save me.
• 8:08
  SPEAKER_00: I remember they saved me 60,000 pounds or something.
• 8:10
  SPEAKER_00: I was like, oh rare.
• 8:12
  SPEAKER_00: Okay, great.
• 8:14
  SPEAKER_00: And then I'm not gonna go to everything, but recently this happened, right?
• 8:18
  SPEAKER_00: I'm speaking to, I'm I phoned up the tax um HMRC, and I'm like, okay, you know, I just want to check out how much I owe because I need to set up a payment plan for the different things I owe, right?
• 8:26
  SPEAKER_00: And I the last conversation I had with them, I owed them about£100,000, just to being real, on one of the businesses.
• 8:35
  SPEAKER_00: I just I owed about£100,000, right?
• 8:37
  SPEAKER_00: So cool, I set up a payment plan, started paying them off, and I was just calling them up to see how much do I owe, and so on and so on, and because I um I was just calling them up anyway to speak to them.
• 8:49
  SPEAKER_00: And they said to me, I was like, so how much do I owe?
• 8:52
  SPEAKER_00: And they said to me, Oh, you owe um it was something like£12,000.
• 8:55
  SPEAKER_00: I was like, wait, what?
• 8:57
  SPEAKER_00: £12,000.
• 8:59
  SPEAKER_00: Now I've made some payments over the last few months, yeah, but it's not that much.
• 9:02
  SPEAKER_00: And maybe I maybe there's been£10,£15,000 that's been paid.
• 9:06
  SPEAKER_00: So really I should be around 80,000, 85,000 pounds, you know, just somewhere around there.
• 9:10
  SPEAKER_00: So when I'm hearing 12,000 pounds, I'm like, are you sure?
• 9:13
  SPEAKER_00: They're like, yeah.
• 9:14
  SPEAKER_00: I said, can you check?
• 9:15
  SPEAKER_00: Like what payments have been made?
• 9:16
  SPEAKER_00: Like, you know, this is not making sense because I've been clear with them on the phone.
• 9:19
  SPEAKER_00: The last I heard, like, I owed a lot more.
• 9:22
  SPEAKER_00: Are you sure?
• 9:23
  SPEAKER_00: They said, Yes, this is how much you owe.
• 9:25
  SPEAKER_00: So I'm going back and forth with them, right?
• 9:27
  SPEAKER_00: And they're like, Yes.
• 9:28
  SPEAKER_00: I'm like, wait, what's happened?
• 9:32
  SPEAKER_00: My accountants.
• 9:36
  SPEAKER_00: My accountants legitimately, just looking at my numbers, looking at what's going on, looking at all the ins and outs, had done something where basically the money which I even owed them, they had done something where they basically had got basically, you could say some of it cancelled.
• 9:52
  SPEAKER_00: Some of the money I owed basically cancelled or cancelled it out against other things.
• 9:56
  SPEAKER_00: Basically, my tax bill was reduced.
• 10:00
  SPEAKER_00: So when I say things like, you know, I'm paying this much money and people get all irate and upset by it, yes, I'm paying them a lot of money.
• 10:07
  SPEAKER_00: But they're showing their value in what they're giving back to me, the time they give to me, that I can get them on the phone, the meetings, the one-to-one meetings, and the ultimately the money they save me.
• 10:21
  SPEAKER_00: So that's why I pay that much to them.
• 10:25
  SPEAKER_00: But I digress back to how can I be broke when all this money's coming in?
• 10:30
  SPEAKER_00: It's because there's a lot of money going out, there's lots of people to pay, there's lots of things, and also not only people paying.
• 10:37
  SPEAKER_00: I've taken out so much loans, high interest loans, to make the shop be what it is right now, and I'm happy with it because the shop is in a place where I want it to be in.
• 10:49
  SPEAKER_00: So now all I need to do is get through this season, meaning I need to pay back all these debts, which could be two years, maybe three years tops.
• 10:58
  SPEAKER_00: But once I get through the season, what you'll what I will find is and what you'll find is actually, yes, I will be the business will be earning a lot of money.
• 11:05
  SPEAKER_00: Yes, I will be earning a good amount.
• 11:08
  SPEAKER_00: And I'm not gonna sit there and start lying and saying that I'm broke when I'm not, I'm just broke right now because I'm behind on things and because I've taken up more money than I can pay back to some, I say to some degree.
• 11:19
  SPEAKER_00: Basically, there's more money going out than coming in right now.
• 11:21
  SPEAKER_00: But the business is going up yearly, so it's catching up, and now I've just got to kind of like sit down, work out a few numbers.
• 11:29
  SPEAKER_00: My accountants are helping me as well, and just be like, okay, how are we gonna sort out these things?
• 11:32
  SPEAKER_00: Paying this back, paying that back, and so on.
• 11:33
  SPEAKER_00: Okay, cool.
• 11:34
  SPEAKER_00: Work that out, and then be like, okay, cool.
• 11:35
  SPEAKER_00: In a year, two years, three years, suddenly we'll be out of the season, and then suddenly the business will be doing well, God willing, still, the business will still be doing well, and then I can now just start taking profits and taking money from the business.
• 11:48
  SPEAKER_00: So when people are like, you know, well, it doesn't make any sense that the business is bought in that much money, you just need to understand what business is.
• 11:54
  SPEAKER_00: What your gross income is versus your profits is totally different, and also what even what your profits are, it's something that people get confused about.
• 12:02
  SPEAKER_00: And I'll just give you a basic rundown.
• 12:05
  SPEAKER_00: People say things like, you know, well, okay, cool, the business bought in this much money, okay, cool, you bought in a million pounds as example, okay, cool.
• 12:11
  SPEAKER_00: Let's just say 600,000 pounds or 700,000 pounds, you know, went to staff.
• 12:15
  SPEAKER_00: Cool.
• 12:15
  SPEAKER_00: So what about the 300,000 pounds?
• 12:17
  SPEAKER_00: Well, you got to also understand that still has to be paid, which is 20% of whatever you make.
• 12:24
  SPEAKER_00: And there's other expenses like rent and all of these debts.
• 12:31
  SPEAKER_00: So when I'm taking out short-term loans and you're paying back it could be£2,000,£5,000,£10,000,£15,000 a month, right?
• 12:40
  SPEAKER_00: And you're paying different things, right?
• 12:41
  SPEAKER_00: You've got to pay them monthly.
• 12:44
  SPEAKER_00: So those are your expenses now.
• 12:46
  SPEAKER_00: So your money is now is going down.
• 12:48
  SPEAKER_00: It's kind of like cool, you paid your staff, you paid, you know, you paid all the barbers, cool.
• 12:52
  SPEAKER_00: Now all the back end stuff, okay, cool.
• 12:53
  SPEAKER_00: You paid your VAT, cool.
• 12:55
  SPEAKER_00: Although the VAT, you know, VAT is like, you know, that comes off first.
• 12:59
  SPEAKER_00: They don't play about, you know, whatever comes in, they're like, yo, take our VAT first, right?
• 13:05
  SPEAKER_00: So let's say you're left with whatever your quote unquote profits are.
• 13:08
  SPEAKER_00: If there is any profits, but just in the example, let's say you got some profits.
• 13:12
  SPEAKER_00: Let's just say you've even got 50 grand left in the business, which I'm not even saying I have, but I'm saying let's say you have 50 grand left in the business.
• 13:17
  SPEAKER_00: You're like, yes, so these are the profits of the business.
• 13:19
  SPEAKER_00: Great.
• 13:19
  SPEAKER_00: You pay corporation tax on that.
• 13:23
  SPEAKER_00: So now you're like, oh great, I pay my corporation tax, whatever that corporation tax will be, 10,000 pounds, 12,000, 15,000 pounds.
• 13:28
  SPEAKER_00: Cool, I've got 35,000 pounds left.
• 13:30
  SPEAKER_00: Yes, this is my money now.
• 13:32
  SPEAKER_00: Let me put that into my personal account and spend.
• 13:36
  SPEAKER_00: No, when you put take the money out of the business and put it into your personal account, they tax you again, income tax.
• 13:43
  SPEAKER_00: And if you're a higher tax earner, you're gonna be taxed about 40% on that.
• 13:48
  SPEAKER_00: If you're a lower tax earner, then you might be taxed about 20%, let's say.
• 13:51
  SPEAKER_00: So anything between 20 and 40%.
• 13:54
  SPEAKER_00: I'm just putting out rough figures so people understand, like it's easy just to shout, I'm bought in this much money, yeah, the business made this much money this year.
• 14:02
  SPEAKER_00: But what were the profits?
• 14:04
  SPEAKER_00: And what did you actually see?
• 14:05
  SPEAKER_00: So when I'm out here on podcasts just telling you guys the truth and being honest, it's not because I'm trying to avoid the tax man.
• 14:11
  SPEAKER_00: I pay taxes, trust me, the tax man sees the bills.
• 14:13
  SPEAKER_00: You know, I wouldn't be talking out here, you know, the tax man sees the bills, I pay my taxes, you know.
• 14:20
  SPEAKER_00: It's not because I'm just trying to act like, oh, look at me, everything's so wrong with me.
• 14:24
  SPEAKER_00: No, I'm not even complaining.
• 14:26
  SPEAKER_00: This is business.
• 14:28
  SPEAKER_00: I'm explaining to you guys so you can understand.
• 14:30
  SPEAKER_00: If you're going into business, you want to own your own business, you want to run your own barbershop, it's not as straightforward as you think.
• 14:36
  SPEAKER_00: And for those which will say for me it was, and I spoke to someone on Instagram during the week, and he understood afterwards.
• 14:43
  SPEAKER_00: I was like, the bills of what I pay here are a lot more than where he's at.
• 14:47
  SPEAKER_00: I said, I spent 65,000 pounds, no, 60,000 pounds buying the lease for where I'm at right now.
• 14:53
  SPEAKER_00: I put 18,000 pounds on top of that as a deposit, which I don't get back till the end of the lease, which is like after 15 years, which is about, I don't know, seven, eight years left on that right now, right?
• 15:02
  SPEAKER_00: My rent is like 28,000 pounds a year.
• 15:06
  SPEAKER_00: The business rates, the is whatever, the electricity is about 600 pounds a month.
• 15:11
  SPEAKER_00: And there's a stage when it was at 1,300.
• 15:14
  SPEAKER_00: I mean, what I'm trying to say is you may have opened up a barber shop in a different part of London or just not in London, in a in a place that is not as expensive.
• 15:21
  SPEAKER_00: So you're hearing the numbers thinking this doesn't make any sense.
• 15:24
  SPEAKER_00: Yes, but you've got to look at it and say, where I'm at in zone two off Shoreditch High Street, it costs more to run than it would be if I was in Woodford, which is zone five or six or four, between four and six, somewhere, right?
• 15:40
  SPEAKER_00: So it may have been easier for you to run your business, and it may have been cheaper, what I mean for you.
• 15:45
  SPEAKER_00: But where I'm situated, it costs more.
• 15:49
  SPEAKER_00: And this is why when you're running your business, you need to understand that it's not just as simple as, you know, well, I can charge, you know, that barber charges£30 there, but this other barber down there charges£30.
• 15:58
  SPEAKER_00: A barber charging£30 in an area that's cheaper to run a business makes more than a barber charging maybe even£40 in zone one of London because the bills are a lot more, the business rates is higher, the rent is a lot higher, the least, the price they bought the lease for would have cost a lot more.
• 16:16
  SPEAKER_00: So I'm just giving you kind of a roundabout way just explaining, you know, when people are saying, you know, it doesn't make sense.
• 16:20
  SPEAKER_00: How could you bought in this much money and but be saying you're broke?
• 16:23
  SPEAKER_00: This is why, because there's loads of things to pay, and there's loads of debts which I'm paying, and I'm paying, I'm getting through them.
• 16:30
  SPEAKER_00: But to make it clear, I am not complaining.
• 16:34
  SPEAKER_00: This comes with ownership.
• 16:36
  SPEAKER_00: This comes when I turn down, take an investment.
• 16:39
  SPEAKER_00: I turn that down.
• 16:41
  SPEAKER_00: I could have taken investment, it would have made life a little bit easier, but I would have lost the hold I have on my business, and I would have lost not lost, but my vision of what I have for the business would have been obscured because now I'd have other people involved telling me we should do this, we should do that.
• 16:56
  SPEAKER_00: There were things which I turned down, there are opportunities which I turned down because I don't agree with them morally, but they pay.
• 17:01
  SPEAKER_00: But if I had partners, they'll be like, What are you talking about?
• 17:03
  SPEAKER_00: Especially if they're not equally yoked with me, they'll be like, you should do that.
• 17:08
  SPEAKER_00: I know I may be going off on one, but I'm just trying to explain to you how you could bring in a certain amount of money but still be broke.
• 17:13
  SPEAKER_00: I'm not complaining, I'm not saying I'm in I'm in a bad situation, I'm just saying I'm broke, and I've got all these debts which I'm paying off, which when these debts are paid off, those debts will now turn into profits for the business, which will be profits for me.
• 17:29
  SPEAKER_00: So this is just a brief explanation because some of you guys haven't experienced business, so you don't understand how it works, and that's not me saying that in a way of being patronizing, it's just the truth.
• 17:38
  SPEAKER_00: Some people haven't experienced business, so it doesn't make sense how someone could bring in that much money but still have no money.
• 17:43
  SPEAKER_00: So I hopefully, hopefully, this has been helpful and it explains things a bit clearer for you.
• 17:49
  SPEAKER_00: But yeah, I'm not saying I'm in a bad situation, I'm blessed, I'm thankful.
• 17:54
  SPEAKER_00: I have my family, I have my health, I'm I'm blessed, I'm thankful.
• 17:58
  SPEAKER_00: So I'm not in a bad situation, I'm not complaining in any way.
• 18:01
  SPEAKER_00: I'm just explaining to you guys what business is like and the realness of business.
• 18:06
  SPEAKER_00: And this has been another episode of The Slider Cuts, Schooled by Owners, podcast where I talk all things barbering, business, and in between.
• 18:18
  SPEAKER_00: And listen, if you're a barber shop owner or an aspiring barbershop owner and you want to learn the trade, how to run a barber shop correctly, how to do payment structures, how to manage staff, how to maximize your profits, how to make money outside of the actual barber chair, then join my community group, the School of Barbers.
• 18:36
  SPEAKER_00: The link is in the description.
• 18:38
  SPEAKER_00: Join right now and join a barber community group because we all know ownership is lonely, but it doesn't have to be.
• 18:48
  SPEAKER_00: See you inside.