Episode Transcript
[00:00:00] Speaker A: Foreign.
Welcome back to the Total profit podcast. I'm T2, your guide to less grind and more gain. And of course, I'm here with the man who loves profit margin more than a CPA loves a clean set of books. This is Tommy P. Welcome back.
[00:00:24] Speaker B: Tu. Thank you. Love the introduction.
[00:00:28] Speaker A: I love today's episode. It's gonna be one that I think most owners are really gonna love. We're talking about what it feels like emotionally and financially when a founder finally gets paid. Paid. Right.
So you start a business thinking, I'll hustle now, I'll get rewarded later. But months will go by and maybe years. Maybe years.
And your team's getting paid, your vendors are getting paid, and you are left kind of stuck duct taping your personal finances together.
We see it all the time. The founder pays themselves last, and that's only if there's anything left.
And if not, they just sort of eat that shortfall and they keep pushing. They keep pushing and they've got this dream in their mind, and it's demoralizing and worse is completely unsustainable.
[00:01:20] Speaker B: Yes.
[00:01:21] Speaker A: Yeah.
We'll go back to an example of a client that we had earlier that was. Had been running her business literally for years. And it was a seven figure business. Seven figure business. But she hadn't paid herself consistently in over two years. And onboarding with Total Profit Management, she emailed us after the process was over. She emailed us with a note that said, I just gave myself my first real paycheck in 26 months. I cried. My husband cried. I forgot what that felt like.
[00:01:53] Speaker B: Oh, that's amazing.
[00:01:54] Speaker A: Amazing. And so now she gets paid every two weeks like clockwork. And it's because she's running her business like one.
So here's how we do it. At Total Profit Management, we believe that owner compensation is not optional.
It's not optional. It is a line item. It's not a leftover.
All right? And we help clients set that baseline salary, even if it starts small.
Open a dedicated owner's pay account, Automatic allocations, usually weekly or bi weekly. And then we tie it to the revenue tiers so that it also scales up over time. And we track it. We track it. Every client has a milestone inside of our system that says, is the owner being paid a consistent, healthy amount? And if not, we fix it.
[00:02:44] Speaker B: Right.
Somebody has to run the business.
[00:02:47] Speaker A: Somebody's got to run the business. And you get in business for a reason.
Yes. You want to make a difference in your community. Yes. You want to be impactful in your industry.
But you also need to put beans on the table and shoes on your children. And we respect that. And so let's talk strategy. All right, if you're listening to this and you haven't been paying yourself, this is where to start.
You need to, number one, know your baseline compensation need. Right. Take a look at your personal budget and set a non negotiable number.
Fair. Fair.
Number two, set a percentage based target. Start with something like 30 to 50% of revenue going toward payroll and include yours in that.
Is that fair?
[00:03:33] Speaker B: We account for that in the overhead.
[00:03:35] Speaker A: We account for that in the overhead.
Separate accounts also help keep those lines very clear where those lines need to be. So keep owner's pay in its own account. And that separation creates a lot of discipline.
[00:03:52] Speaker B: You can be an owner and the employee at the same time.
[00:03:55] Speaker A: Right.
[00:03:55] Speaker B: You know, create that segregation and.
But you are an employee of the company.
[00:04:03] Speaker A: Build quarterly profit distributions. I know you do that with total profit management.
So beyond your salary, you're stashing extra profit into a separate reserve and you pay yourself quarterly. And it's time to celebrate and it's time to grow.
[00:04:17] Speaker B: Exactly.
[00:04:18] Speaker A: That's so much fun.
And don't forget taxes. Speak to taxes for me just a little bit.
[00:04:23] Speaker B: There's knowing your costs and knowing how you're transitioning through the year.
You can get to a point in the year where you may have to pay taxes. So you get a great tax consultant to help you.
Maybe improve a piece of equipment or add a piece of equipment or add a person to help you. But you know what the profit is before you talk to your tax person. And it's like you call them up and say, we got a problem, let's fix it. And it's a positive problem.
[00:04:58] Speaker A: We will guide clients to allocate 15 to 25% of their revenue into a tax reserve as well.
So that when April comes around, it's not a gut punch, there's no surprises. You know what your accountant is going to say is when you're.
[00:05:15] Speaker B: Nobody likes surprises.
[00:05:16] Speaker A: Yeah. You always know what you're. I like that you say that. You know what your accountant is going to say.
So this is phase five of the performance margin zone. And this is where the identity shift gets emotional. It's not just about the numbers, it's about the dignity of the owner. And this is where it gets really fun for us too. So when you start getting paid like a CEO, you start acting like one, Is that fair to say?
[00:05:42] Speaker B: Oh, absolutely.
[00:05:43] Speaker A: You stop playing defense and you start. And you start leading from the front.
This week, we challenge you to stop treating your pay like an afterthought. It's not an afterthought. Pick a number. All right? Even if it's just $100 a week, pick a number and start now and start being disciplined about it and set it aside. And if you're ready for structure and support and some celebration when those checks start rolling in, then come see what total Profit Management's onboarding really looks like, and you'll never go unpaid again. All right, Next week, we're going to be diving into something that is just as juicy. The moment you stop checking in every five minutes and start trusting your systems, that's when a business starts to become an asset and not just a job.
So let your systems do the sweating, I guess, is a way to put it right.
[00:06:35] Speaker B: Until then, it feels odd to pay yourself, but it's what it's meant to be. So when you get to that point, step back.
Take her cool. It's gonna be okay.
