Using the 4Ms of a Financial Plan to 10X Your HVAC Company with Brett Neal

About this Episode



🎙️✨ New Podcast Alert! 🚀💼

We’re diving deep into the financial strategies that can skyrocket your HVAC business. Join us as we unpack the power of the 4Ms in your financial plan with our special guest, Brett Neal himself!

In our latest episode, we’re delving into the financial strategies that will propel your HVAC company to extraordinary heights. Let’s explore the roadmap to 10X success through strategic financial planning.

Ready to 10X your HVAC company? Tune in now on 

00:45 – Our guest for this episode

01:01 – Welcome to the show, Brett Neal!

01:41 – Let’s get to know Brett Neal 

03:48 – Initial challenges in understanding finances

04:51 – Accounting is tedious

06:10 – For owners, what’s the baseline for you to know all about accounting?

07:45 – What qualities do you need to look for to help you understand the numbers of your business?

09:52 – Don’t abdicate

10:42 – The Roadless Stupid book

1349 – Cradle to grave financial services

15:17 – EAT – Earning After Tax

15:57 – Forecast and projection

18:07 – Budget is blown up in HVAC

18:25 – Using both forecast and projection in planning

19:15 – Visionary and Integrator

20:38 – The 4Ms of Financial Planning

21:43 – Maintenance

23:20 – Metrics

25:01 – Management

25:34 – Money

26:19 – How to collaborate 4Ms collaborate?

28:02 – How long would it take to roll up in terms of 4Ms?

30:55 – How can a company grow in terms of finances?

36:58 – How to reserve the culture?

38:36 – Profit first from the perspective of the accountant

42:50 – What is Financial Freedom?

46:53 – How to contact Brett Neal?


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Audio Transcript

Welcome to the H VAC Financial Freedom podcast, a show to help you create more revenue, profit and freedom in your life. Now, your host, John Victoria. Hello and welcome everyone to the HVAC Financial Freedom Podcast. If you've been following along on social media, as we're doing these live, this is the third podcast we've done this week. A lot of incredible guests and I'm really excited, especially for today's. And so our guest today, he is a CPA who specializes in helping HVAC companies grow themselves and in cradle to grave financial services.

We're talking money with the money, man. So we're gonna welcome him on. Welcome to the stage, Brett. What's up, John? How are you doing today? Good, man. It's a wonderful Friday. That's not real. All Fridays are wonderful love Mondays too. But Fridays, Fridays are that much more special. Yes, sir. And I think this weekend is a special one for a lot of folks who got Memorial Day weekend. So it's for some folks um sometimes not, not the business owners, but uh for some folks who got a three day weekend on our hand.

Uh Yeah, vacations seem to never strike at the right time, but when you have the opportunity, you should definitely enjoy the moment. Yes, sir. So yeah, so just to kick it off, um for anyone who's not familiar with, you would love to, just to give a quick background on who you are and the things you do and how you got to where you are now. Yeah, I mean, that's probably a crazy answer. Definitely. Um up and down roller coaster. Ultimately, the, the end result is high velocity accounting with my wife C Shanil.

Together we are CPA S that specialize in HV AC. Um, primarily accounting. Um, but the road there is kind of what's behind me. The airplane, I started out as an aircraft mechanic out of uh out of high school where blue collar kind of meets white collar later ended up in an accounting class and found that it was the language of business and it kind of just connected. Unfortunately, it also consumed me for about 15 years. So working on getting the CPA license and studying Gaap Gap counting. Right.

Yeah, exactly. It was all, all good stuff. So happy to, um, put it in my pocket and then along the road, um, you know, CPA firms are like gas stations, there's one on every corner. So how do you stand out? Uh, it's important to niche and, um, really just hit it off with a special person. We had a great connection and I found my niche and it was in HV AC. Um, I've got to watch the industry mature a little bit since we've entered it and it's been great to just great to see.

That's awesome. And, um, and I have a fun question for you later. We don't have the answers now, but I mentioned gap. Uh, we actually have someone talking on profit first next week. So I, uh, are you familiar with profit first? And, um, yeah, so we'll, we'll get to that later but that just, that just came up. But, um, yeah, so I guess just to kick things off, um, you know, you mentioned that really, you know, finance accounting, it's, it's the language of business. Um And at least from what I found a lot of the folks who get into the HVC or even the con the home service space is that they don't start off with understanding all of, you know, the different business concepts they get in because they have the skill, it's really valuable, they want to be their own boss.

And, you know, like, hey, let's see if we can make it work. Um And so they don't necessarily have a lot of those different hats, one of them being financed. And so, um I wonder, I was wondering if you could just uh talk initially about, you know, some of those initial challenges someone might have or be experiencing when it comes to, you know, putting on that finance hat or understanding their numbers. Like, what does that look like from what you've seen? Yeah. Putting on, putting on the finance hat. Right.

And, and that's ultimately the, the, the end result is wanting to understand the numbers. Unfortunately, the numbers can be kind of crazy. I, I kind of like to start out, even accountants themselves aren't necessarily good business people because just also as a tech in the truck, someone who is kind of entering the world of accounting is, is maybe seeing the process but not necessarily understanding the outcome and really getting your head around that big picture where you're heading. Um, you know, accounting really helps tell the story.

Unfortunately, it is its own language and it is, I don't wanna say it's complicated. Um, chat GP T just passed the CPA exam. So, you know, I, I, right. But, but it's tedious and what I like to tell what I like to tell guys that are getting out of the truck is, don't, accounting is tedious. Number one, number two, don't become an accountant, right? Don't get out of the truck just to become an accountant. I'm gonna learn quick books and I'm gonna figure out this, um, spare yourself back.

Get to the point where you want to know the numbers and then that's, and that's where the struggle is. It's like, OK, I understand that I need to have a balance sheet and a profit and loss statement and it's not even just then it's like if you were to reverse engineer that? Ok. How do those numbers get into those right spot? What spots should those numbers be in? How do those numbers get into it? How long is that gonna take? And what does that look like as a process?

And then how often are we are spitting these numbers out and reading them? And do I know they're right. Is there anyone verifying them? So, you know, I, I like to play around and be creative. Anytime I start doing something in Photoshop, it starts out looking nice and, and after, after about an hour, it looks bad, I've messed it up entirely. So I know it's each, you know, each to their own inexperience is, but um spare yourself some of their struggles, right? If you're trying to grill a company, uh get someone in there that can just help you get those numbers right of that.

And, and maybe there's, there's a, a follow up question like, what, what is that baseline? Because, um you know, back from my time, you know, back in the navy told us inspect what you expect. And um and so I'm, I'm trying to, I guess I'm maybe sure to clarify for everyone. Like what is, what is that baseline? Um I it sounds like a key piece is definitely partnering with someone who has the deep expertise to do this, but for an owner, like, what is, what is that baseline for them to, you know, is it, is it to just know that the terms or is it to like, really be able to understand like, oh, these are the what the number should be like?

What's, what's that baseline? Someone should be at? Gosh, I mean, great baseline. And this is what we do too is really just print out that first profit and loss statement and, and may as well print out your balance sheet too. We like to say that the bodies are in the balance sheet, kind of the details are hidden in the balance sheet, but uh pull out your first profit and loss statement and and I would say get to know it, mark it almost like on a on a board and start printing one every week if you're filling in your data.

Um and and look at it week to week, you know, month to month probably is gonna be more reasonable for most people in the beginning. Yeah, some and compare right, a a profit and loss statement can tell a story in a singular month over a quarter, over a year. But what really is helpful is to look at it month to month, um quarter, over quarter, maybe over a budget so that you can see where you're heading and you know, like you said, start measuring it. Yeah, I love that and, and that can be intimidating, right?

You know, if someone's not a numbers person like getting into that. Um But, you know, as you said, it's like so important just to, you know, see where your company is going. And, and also like, if you want to project in the future, hey, you wanna make certain investments, you wanna grow here or there. If you don't understand your numbers, then, you know, the, that, that puts you in a tough spot. Um And so maybe it's because you talked about the partnership with, you know, working with someone who, you know, is really good at the numbers.

What are some of the things that you'd recommend someone look for in that individual instrument that they were gonna, would partner with? Yeah. So let's say they wanted to bring in a numbers person, whether it's external, internal, like how do we find the right person? Right? Because you are trusting them in a way. It's like, it's like faith, like, I don't know this thing, but I want, I need help. I need a partner. And so what are some of the things that you'd recommend people look for?

Yeah, just, I mean, just like just like trusting someone with um you know, someone on my roof, right? Or someone in my attic and telling me that they've done a job or installation correctly, I'm also trusting uh home service professionals. Uh I mean, there's a lot of ways, you know, just because common CPA is behind my name doesn't necessarily breed confidence. There's, there's a lot of accountants and CPA S out there. Um, you know, industry and, and understanding the niche is a great start. Um, but, you know, it depends on where you're looking.

If you're, if you're going in in house and you kind of want that control and oversight, um, you know, then I think you're just looking for stability, you're looking for good character, right? The same things that you would want in your culture, um, externally, gosh, I mean, you have the, you have the world in front of you at your, at your fingertips. I would definitely talk and share with different. Um I know there's uh you, you know, there's very similar accounting firms out there that do what we do kind of that cradle to grave collect data, prepare, presentation, go over it with the owner on a quarterly monthly basis and talk about future outcomes.

Um I always said this about lawyers or even uh other CPA si love interviewing other CPA S, you know, is it, is it something you can mesh? Well, no, I can trust. I mean, start with just the basics. Um We all kind of have to trust that. Yes. Yes. Someone said they can do, can deliver on a little bit, right? If somebody tells me they can install a complete system on top of my roof, I, I have to trust that they can do it. I can look at other reviews and things like that, but just at some point there's gonna be a certain level of trust and then what don't, don't do, um, what is that, what book is that?

Uh, I should have go that route but is, don't abdicate it, right? So don't just say, hey, my accountant has that. My accountant takes care of that. Definitely get in there, ask questions. Oh, why did you put this expense in that category? Oh, ok. That, that makes sense to me. Now, why did the profit and loss statement get broken down this way? And in the back that up, you know, niche accounting industry, accounting is if I provided you with a gap, profit and loss statement, that would pretty much be useless, right?

So what we want is a financial statement that gives us the story that breaks down gross margin, profit margin, uh top five. If you're a, you know, if you're a next our next our network person, then you know something like that, right? Your automobile looks fence your overhead, things like that. Love that. And, and I, I I've heard that I'm trying is it was the book you were referencing the road less stupid by chance? No, but I'm gonna write that one down. That sounds good. No, it's the uh you'll come to me. Yeah.

Well, both for the books of the road. Less stupid. Uh Keith Cunningham, amazing book, amazing Training for CEO S and yeah, one of the things he mentions in there is uh about delegate but don't abdicate. Abdicate is, like, throw my hand up. Yeah, whatever. Like you got it and you're just having blind faith. Um, and I think that that can be dangerous because if you don't know what's going on with your books and, um, there are some less than great characters, uh, in your business. Like, if you just that, that can be bad.

And so, um, super great book highly recommend for anyone wants to check it out. But I think that's a big takeaway. Um, um, don't abdicate your responsibility and then it's still your business. Yeah. Well, I mean, I hear so many stories are, um, I don't want, you know, I don't want to put a name to anything but anyone who has access to money should be watched basically. Right. And it's just, it's, it's human nature. Um, a, a dollar bill is easier to pick up, you know, obviously, than the, than to take a vehicle off the, as off, off the property.

But without controls in place, you won't know that those things are happening and, and yes, you know, everything comes with a cost is it, is it worth that cost to control it? It is so much going out the door that we need to really look at that. I mean, you're gonna know that as you grow, right? I mean, we talked about that with inventory a lot and we're really gonna try to look for loss on inventory in smaller companies that could cost a fortune. Mhm. But can we look for loss where checks just didn't make it to the bank?

It has called pro says that you know, the money was received but within a week isn't showed up in the bank register. It would be nice to have your accountant tell you that. Yeah, there was a, we had another guest on and crazy story. Uh one of the technicians, they uh they created their own like stripe account. And so, you know, the CRM shows, hey, we know we invoice this, but then they were accepting the payments on their own personal account like this, the only thing there was like the checking number, everything looked the same and they were routing the money to them and it's like those small things, right?

It's those small things that, um if you're like, I, I'm the, I'm not gonna look at anything you got, you got the numbers like I, I'll just focus on what I'm doing. You'll miss, you'll miss things like that. Um Which is absolutely crazy. I believe the company is Billy go. The gentleman is, is he Billy Stevens? I haven't met him myself, but I, I've heard him on a couple of podcasts and he says, you know, we know our numbers by the minute and, and I think that tells a huge story right there.

Is that, is, is that a big involvement? Like, is that a full time? Position. Yes. But, you know, is there a place for it? Absolutely. Yeah. 100%. Yeah, I know. They, they got a, they got a nice, nicely sized enterprise as well and they're, they're doing, they're doing quite well, you know. Right. Is that, you know, I mean, that's something. Right. You know, the, right. Yeah. Awesome. And I, I guess before we hop to the four MS, uh, just, just for everyone who might not be familiar with the term, like, what do you mean by cradle to grave financial services?

Like what is, what is that? What does that really mean? Well, it comes from my father, my grandfather used to own a mortuary and wanted me to be a mortician and that just wasn't gonna work with for me as a but, but retrospect as a CPA, it would have been a fun little business to be a part of and own. Um, what we don't do is just bookkeeping in order to give a, an individual the best tax position. Uh, I think it's important to fully understand, you know, I don't need to know.

So cradle is us doing the maintenance, all, all the bookkeeping, giving, giving the, the full process to grave to, hey, in our journey together, you're gonna have Children, you're probably gonna set aside money. You know, maybe you might buy residential real estate. Um, you might be partners in other s corporations or LLC S. How will that affect your ultimate outcome. So cradle to grave is, you know, and, and if I got bad numbers, I'm gonna spit out bad results. So, overseeing the process, making sure that we're getting good information in that we have good financial results around the business and that we're also able to consider your W-2, your wife's W-210.

You know, you may have done a tax plan around your S corporation, but your wife's a doctor bringing in a half a million dollars. Like I, I kind of blew that tax plan. So, yeah, it's important I think to be able to see and I know uh Ida is right, we're trying to grow our company and we want to understand cash flow. But I also like to talk about eat earnings after tax, right? With, so how to eat, right? You gotta eat, you know how to eat, right?

It doesn't all have to be pain and suffering while you're trying to get there. You can enjoy a little bit. Yeah. And I think, yeah, with, uh, there's two sides of people like that I've seen and, you know, there's the penny pinchers and the people that are just very extravagant. It's like you need to be somewhere in the middle, right? You know, you, you can enjoy your life along the way of building this enterprise over the next decade, two decades. Like don't, don't kill yourself, but also don't blow or use all your powder.

It should be, it should be what your budget is, it should be what your budget is and, and, and projected, I like to talk about forecasts and projections. Um forecasts are what um like the weather people do, right. The only job that somebody can be wrong 212% of the time and still be employed. So, right. So forecasts are just simply that, you know what we're gonna do 2000 million next year, we're gonna do definitely the next quarter, I think we can do, you know another, another 21500 million. Those are forecasts and the to build on a little round models and kind of what we know and what we've seen, but it's not a projection and a projection is historical data um with, with, with capacity with what we actually have and, and what we think we can do with that, right, based on big four booking rate, conversion rate, average ticket and cost cost per acquisition.

Um And then of course, efficiency. I mean, you really need to know your efficiency if you're gonna build, build out that budget. But when I say that budget in the fun, you know, you're gonna have an end of year party with the crew if you're gonna go rent a, you know, a little real estate and take everyone out so they can go hang out on the lake. Let's start accruing for that. Let's acknowledge that we're gonna pay for that. Hm. And I guess just to distinguish between the forecast and the projection.

So you said projection is when it's, it's based off historical data. And this is more like the realistic goal and the forecast is that just more of like, hey, this is the more rosy picture like, oh this is possibly where we could go, but it's not based off, you know, it could also be, it could be bad and good. Obviously, most people are gonna, you know, are gonna be good. Um But a forecast is just some uh in, in most, you know, it's a, it's, it's not a projection, it's just I just want to be careful and just kind of using the words specifically because a projection is, is a budget, we're projecting that this is gonna happen based on things that we know um forecast for the year or you can even forecast a month.

Obviously, your forecast might be a little bit more correct forecast out for a year. You know, your chances of actually hitting those numbers specifically are gonna be a little off. And then what is it just, just, what is it based on? It's hard to predict the weather three months out really? We know it's gonna be warmer but we don't know. I mean, so many uh so many years, year after year, the budget itself just gets blown up in the first quarter for education companies, right? Like we just know January February Mark is gonna be something.

Let's put some numbers in there and then it, it's hit and miss. But once, once you start to hit your capacity, you really start to see the numbers fall into place. Gotcha. That's the beauty I see. But both have a place you're saying, it's like you, you, you use both in terms of your planning or are you saying just use the projection? Well, um no, let's, yeah, let's. So I think you're right saying both a little bit but the projection is really what's gonna happen? The forecast is, yeah, like how are we gonna get there?

Big picture kind of like how we get there, how many texts do we need? But a projection is gonna be built around that actual numbers and efficiency, the budget projections, the budget got it. Ok, perfect. You know, your forecast might be a little bit around market cap, right? Like, you know, we can probably do if we're 2500% market cap, we can do 2000 million. Um You know, we would have to do X mini homes. That's kind of a forecast. Are we going to be able to get there? Sure. All right.

It's just loosely defined God, it's like the big picture, you know, and it was more attraction, you know, the visionary, the visionary is probably more about the, you know, the forecast like, oh yeah, we're gonna this big air auditions go, we're gonna do this and then the integrator more like the ops person like no, no, this is what we got. This is what we will be able to do, uh based off everything that we've seen. So, yeah, maybe that could be a good distinct and I like, I guess I kind of like to bring it up a little bit just in the sense that, um, you know, I know that a budget, like people are like, oh, budgeting like it's, oh, it's a painful thing and because if, if it's not even really aligned around anything for sure. Right?

Like last, last March we did 303,230. So this March we should do 2100 210 everything was a percent of that 480. So do we make everything a percent of that 520 or, or do we, you know, well, rent's gone up like, oh my gosh, what a tedious task and what is it really built around? So I, I get why, you know, people are like, why do I spend all this time doing budgets? But, but what you're doing is projecting, right? If I can project that? Well, I know that I got five service techs on staff and I know how efficient they are and I know what they can perform.

Well, then we can start to back into some real numbers. That's the for M framework. That's where we're heading. Love that. Hey, well, let's, let's hop into it then. So we got the four MS. Um and I guess the fifth M is that it's currently a mystery. Uh, what, what, what these things are. So, yeah, break it down. Like, how'd you come with the forums and like, what's, what are they all about? Yeah. Whiteboard. I, I have to live with a white board. I got notebook around me at all times.

Uh, I love to dream up stuff and just make stuff. I used to see myself as, um, really understood gap accounting and all the terms. And then we would do all these fancy journal entries and we would give our the results back to the business owner working at a, you know, at a, at a larger accounting firm and the the poor individuals, they didn't even know how to post the journal entries, didn't understand what those results were giving them. Often. We would affect their accounts payable or accounts receivable just to zero out balances because we wanted to get to a cash basis tax return.

It was a huge disservice in the past to what was, what was done for our clients. Yes, they saved money. Yes, they got a tax return redone. But in no way, were they building their business around working with their CPA? So I said, well, you know, hey, if we're gonna do more bookkeeping, more of this cradle to grave, what's the point of it? And you know, pillars, businesses are built built on pillars um or framework. Um really it kind of comes down to like a framework. And really, so the first one is maintenance.

I say accounting is tedious, it's just not fun. Um It's, it's, it's repetitive. Unfortunately, technology is helping, but at the same time, that process still has to take place. Credit card has to come out, the check has to come out purchase order in some cases, right? A sales order, invoice, a matching process. So maintenance is number one and we take that and we perform all of that maintenance for you. Whether you know, people use like hub doc or um we use DEX DEXT to scan and record receipts, get invoices, um record it all into your platform, preferably right now, quick books online if you're growing might be something like intact.

Um I don't know, there's other ones out there, you know, stick with what data in there. Yeah, stick with what works and what's known, but get the data in there. Um You know, build the chart of accounts, recognize that that is also moving, you might have some new expenses you might take on different categories. So the chart of accounts itself is not just fixed. Um You might play around with um financing fees being a reduction of income or a cost of goods sold. It kind of depends on what side you're on.

Um Right, stuff like that. So it's just getting it done maintenance, they want to beat up, beat it up to get the idea because it's probably where the bottom of the triangle. It's obviously where the most of the heavy lifting takes place. Uh The behind the scenes stuff that you don't want to see. That's why I say don't get out of a truck, become an accountant is because of the maintenance side. No fun in it. Then, but then once you have that you have metrics. A second M metrics is financial statements.

KPIS key performance indicators and just gross margin metrics, right? The percentage in the profit and loss statement. So what we wanna do, what we like to do is just print a profit and loss statement for the month. Um Look at it as a percentage of income. So each line item is a percentage of income and that's how we're gonna get the cost to get sold. That's we're gonna see our vehicle costs, um direct labor materials equipment, right? That way we're measuring it to how well we did them.

There's gonna be some variances, you might have had five payrolls in that pay period. You might have, uh you know, your vendor might have kind of stacked your warehouse with a few extra units. So depending on how you're gonna do inventory can distort stuff back to maintenance, right? But again, metrics is the, is the picture. Now you got financial statements you have KPIS to work around. Um And then you have, and you have metrics that begins to build consistency, kind of like how we open the show John.

Um, what's the baseline? Well, the baseline has got to be one financial statement at some point and then, right, and then starts and, you know, when the days go by no matter what you um, I don't know, Tommy Melo, what you say, underestimate what, what you can do in a year. Overestimate what you can do in a year. Right? Um, so let the days go by, don't, you know, it's not gonna all happen at once. One month, two months, three months, a quarter. Now you're seeing six months, I mean, gosh, wait until you get two years of data and there like, oh my gosh, it's actually working.

I'm starting to see a, you know, a consistency here uh which gives you then that opportunity to be a manager. Once you have good maintenance, you know, the numbers are secure, then you have metrics financial statements to look at KPIS. You're able to become a manager of the business. You can sit with a crew, your board, your staff, your partner and say, hey, is what we introduced this quarter. Was it working? Right? Did our marketing hit? Um Was our efficiency better? Was, was our new guy John as awesome as he says, he was, you know, you have that ability to compare your notes and make a change, you know, stay the process less of it, more of it and and be the manager.

Um once you have that then it, then it's all about money. And that's the last m uh, cash flow. I talked about sales, not sales tax, um, tax returns, income tax returns. It is different between being I'll bore you between being an S Corp and an LLC in a partnership. They all have different tax taxations tied to them. So, uh, once you're on the top of the, the triangle and you can really see the big picture, you've made your decisions about the company. Um, then you still have opportunities to say, hey, do we wanna continue being in corporation as the tax law change that we should consider now being a sort ac corporation which is irreversible for five years, right?

Big picture stuff. Um Do we want to consider doing acquisitions if whatever that road is heading you down, you're gonna have a much better platform to springboard. That, that's basically the four MS. Um, you know, each one, you know, maintenance is daily metrics, monthly, quarterly, weekly management, probably monthly with us if you're working with us and then, um, quarterly and annual on the money side, looking at long term cash flow, you know, hey, well, you're holding on to, you know, you're holding on to bonds, you're paying a little bit in interest, credit card debts, getting, getting high, you wanna buy a truck, you're looking to add a, add a building, you know, how is it gonna affect uh, cash flow next, next year, next quarter.

What do we need to do to be there, be ready for it and, and this is sequential, right? Like, like I, I'm imagine that you couldn't do this unless you did sequential. Like you can't just hop to management if you have no metrics or key kpis or if you have, if you hadn't been doing any maintenance. So, is this sequential? So it's maintenance metrics? Management then money? Yeah, I mean, if you're working with us, we would build out a plan. Talk. A lot of talking. I always say, how do I not be, you know, a big thorn in your side in the beginning?

Because I have a lot of questions. What's this expense? What's that? Uh Why did this take place? How does your operations look like? Why did you collect money that way? Uh Just to understand and see what's going on. So, yeah, but at the same time, you know, we're all entrepreneurs. I'm assuming if you're listening to this podcast, you're probably a business owner. You're probably an entrepreneurial mindset. So of course, you're gonna already be in that management mindset mode dreaming one way or another but take notes and prepare to, you know, to go around that.

Mm I love that. Um Four MS and in terms of a roll out like how long, let's say someone, you know, they, they have some things going but it's not optimized. Like how long would it take to roll out the four MS for someone who like, hey, I just, we've been doing stuff but we want a clean slate. We want to, you know, get things better. You know, we wanna have clarity on our numbers. We want the forums, right? Like how long does it take for a roll out?

Is this something that's like, hey, this is plan we're gonna build out over a year and we're gonna execute and then get it ironed out or, oh, this is something we do over a quarter. Like what's, how, how should people be thinking about getting something like this done? Well, I, I laugh because, um, so HV guys stopped talking to me in like May, right? Like, and then I can't get on the phone with them back until like October. So, um, that tends to lengthen that period. Um And, and then unfortunately, just as CPA S tax season, January February and March is brutal, but also tends to be an onboarding season for us.

Um I do tell people basically 90 days to get an idea, 30 days to be able to see the whole system. Um Right. But like, observe, make sure every bill came through. Um, you know, maybe make little analysis about, about the, about the year based on one month, but I've seen hopefully have some historical records. Um, things like that just extended if there's a transition between another uh CPA over to us, um, or bookkeeping over to us or if we're gonna work, you know, with somebody internally, um, are they gonna be there?

Is it, are they there every day? Right. Sometimes the internal bookkeepers, like, just shows up on Fridays and kind of post things and I'm like, ok, well, if we're working with them or, you know, that will delay things. Right, if I can get information every day. So, but I, I really do a, for 90 days for a clear presentation um of where you are at and, and they forecast of where you could be. Um And then if we want to move into a projection based on numbers, you're gonna tell me that's the next step, then we build out that projection and, and create a budget, put it back in quick books so we can test on a monthly basis.

That's awesome. I mean, it's fun. It's fun because once the numbers are in there, um you know why me like, oh, its stock was up this month. Oh, yeah. Well, we bought a truck and we stocked it. I think it's soaked. It's just so the story is there, especially when you got to see it. Um You were part of the process, you know, making things happen. We hired Tim and we had five payrolls. That's why payrolls through the roof. Do we wanna do a cruel journal entries?

And I guess building off of that. So we got four MS and um in our conversation prior to this podcast you shared with me, you know, we don't have to talk about their name, but um you know, company that basically like 10 X, right? They grew tremendously and, and so, you know, a lot of companies may be doing some form of this. So I I'm just curious like, what, what distinguishes those that, you know, kind of grow linearly and then some that grow like exponentially? Um Are there any like best practices, key decisions or ratios that you saw them maintaining that?

What could be like, helpful for, for our listeners? Like, oh, I should be doing this or I should be expecting this when this happens. Like what, what are some of those trends that you, you've noticed for the company that really do break through in a big way? So, uh everyone's gonna love this, it's mindset. I mean, at the end of the day, it's, it's, it really is mindset. Um We've worked with, we've worked with venture capitalist type individuals, right? Hey, I have a lot of money. I'm buying this company.

Um It's gonna be amazing. It would be amazing. And in and in a month, right? And in a month and in three months, it's not amazing. And it, and it's, it's because you can't just throw money at it. So, so I would say like with a company that 1003 X, I mean, the gentleman was in it to win it, right? He didn't go home like he lived it and he was a huge supporter of his people. Um It was offended if I couldn't remember a name, you know, I'm out here in California and, and he's in the Midwest and, and he was growing his staff and I was like, oh, who's, you know, and he'd get offended.

Like, dude, that's my buddy. Like, yes, I, I made it a point to go out and remember everyone's names. Uh Culture really was, is what I see. Time and time again, number one, the, the, the companies that don't do as well. Um There's internal conflict, there's ego um or there's or there's fear and I totally get it all like it is hard to be, I'm non confrontational. I don't enjoy it. I definitely don't want to be that person. II I love the idea of being the cheerleader, being a leader in itself is hard.

Um accepting blame, right? Taking blame, acknowledging blame, acknowledging that things need to get done one way or another. Those things are just, they're tough. Um Having the support like, hey, we said, you know, we said we were gonna sell 25 units. You said you were gonna sell five. If we did that, then we would be able to, you know, make these accomplishments and hit these goals. The financial statements are showing that we're not there yet, right? We're pacing ourselves on day one and we're not there yet. Day three, week three, we're not there yet.

So we need to fix something. So, in that sense, I think that's where I get back to knowing your numbers by the minute is, is the crucial reality. How many phone calls did we get today? What's our closing rate? What's our booking rate? And you know, it's hard to say on day one, how well are we moving along? But you still gotta do it. It might hurt, but by day three you might be catching up again. And by week two you can see how well you're pacing and any changes changes you need to make.

Hm I, I see that as a key right there, right? For accountability. It's, it's not like based off a gut feel. It's like, hey, we, we have numbers that we're tracking. These are the goals that we stated and look, here's our performance, we're above it or below. It's not, it's no longer like an emotion thing. It's like these are, these are our numbers, right? This, it's because we've set up the four MS, we got the maintenance down, we have our metrics. Um It's, it, it can, it can become a different conversation and it's like, I feel like you should be doing this or that and this and that.

But it's like, hey, this is where we're at and we, we, we need to make some changes. Um We're not, we're not tracking for our goals, um which we said were important to us, right. Right. For a team. I mean, we can all be in these podcasts and read all these books all day long and it's so hard to share that information. Like I see it and I feel it but how, like, you just don't, you don't see it today, like, ah, you know, but I would say, like, business owners are calm.

My goodness, most of them are very calm. They are, they need to be right. You know, that I was speaking to someone today and he said, uh, that something about the head is the, the head that wears the crown. Oh, man, I forgot the quote. But it basically like the person who's wearing the, like the person who's a leader. Like there, there, there's a lot on their back, there's a, there's a big burden on them. Um, and yeah, having that mental fortitude just to be calm. And I know a lot of, I've been a part of like, eo and, uh, you know, these different groups and they're really big into wellness, you know, the wellness retreats and just staying calm in, in, in a storm.

That, that's, that's out there. Um, I'm a pretty excitable person. It's tough sometimes. Right? Like action. I want to see it now. Like, let's go. So I'm a worse, you know, I, I, there were 10 rules, boy, they'd have to be right there for me every morning to read. Yes. The way to keep me, keep me focused is is there any advice to give? Because, because it seems like culture was that ingredient, my culture slash mindset. How, what would you advise someone who they need to reverse their culture?

Like it's, it's like, not good right now, like the things you mentioned, oh, the conflicts, the ego and they're like, oh it's here. How, how would you recommend um like making that shift to move towards a, a more positive culture and a more po positive outcome? So it seems like that's, that's like one of the key ingredients. That's an, that's an amazing question, John. I have absolutely no e I emotional intelligence, somewhat typical of accountants with a little, little course at times and I try, I struggle, I try to use empathy of, I mean, I, I read books just to be a better person to listen, to, learn to listen.

Um and I still am horrible at it and I even have two little kids that uh help me to want to empathize and understand where they're coming from. So I can only imagine, you know, I mean, I think the biggest thing is you take a look in the mirror and go, I'm the one doing this. I Yeah, you right or wrong. It's me. So, you know, just accept that like, you know, it's, it's nice to enjoy. Oh, everything's going great. But why? Really? Why? And can that last?

And everything sucks today? Well, you know, you gotta make a change one way or another. We, we were, I was talking with this other, a gentleman, a roofing contractor and he was like, he was like, why would you do anything, uh, you know, like, difficult, why would you put up with difficult scenarios? Right. If you don't have to. Hm. Funny. There's, there's enough, there's enough people but there's not enough time and, you know, I don't never wanna, like, ST step on people, but it's like, if you're, if you're just button heads and, and you know, it's not working and you know, hey, we have gut instincts, listen to them whether right or wrong you gotta make a decision and move on it and don't just belabor it day in and day out and I, I do that to myself and I think now why, why are we doing this?

It's so much nicer once you got it done. Yes. Love that. And I love the transparency as well. Um Yeah, and it's like, I guess maybe, um, uh, another question I mentioned profit first earlier. Uh I did profit first is, seems really popular in the business world. It's brand is not familiar. It's a system. It's based off a book, Mike Michael. I, I never pronounced his last Milo. That's what it is. Yeah. So it's, um, we've implemented it in our company, but then we've shifted from that.

Um, and in the book, they talk about how, um, you know, the way they do profit first might not always be similar to, you know, what, what your accountant might want. And so I'm just curious, your perspective, you know, um, from your side of the fence, like, uh, if, if you're familiar with it, um, like any thoughts around profit first and how that all works. Yeah. I mean, you know, there's nothing wrong with the, uh, envelope system. Well, I'm gonna, I'm gonna compare it with Dave Ramsey.

I think Dave Ramsey is also a great individual. Um, but at the same time, I mean, you know, debt's gonna, that's gonna get people right now, Dave Ramsey is very right. Right. All right. But over the last 10 years, he wasn't, um, you know, people were probably missing out on opportunities to use debt to finance their dreams, could have made some money off of that. Um, that landscape is changing a little bit. But, but what Dave Ramsey is good at doing is helping people who just don't have a clue and understanding.

Um I didn't have a clue. It wasn't. I'd actually bought my first little pickup, an S 10 and then I took my second accounting class and we learned amortization schedules and how much interest costs literally like lost my shirt was like, oh, what have I done? I had no idea. You know, I had a loan to pay it was only what, a $12,000 pickup. I had a loan to pay on that pickup and I realized it was gonna cost me like 1500 extra dollars or something like that. And I was like, oh my gosh, heartbroken.

So you, you know, you, you do that on a house on a $500,000 house and, and 40 years or 30 years and you see what interest is gonna cost you um changes things, right? So, so there is some um and having financial acumen knowledge definitely um helps but I kind of lost track. What was the question like, how do we, how do we, oh, the profit first, the first containing containing is my thought, right? Because if we don't fully understand, then it helps contain. So profit first is great for that the envelope system, you know, it's kind of what they've kind of done for you is say, hey, in general, these sites, these types of businesses have this kind of gross margins which means their cost of good sold or this much.

So why not every time? And it's, you know, we all accountants do this to every business owner which is tax. It's like, hey, don't just take that revenue dollar and think it's all yours. You know, you got to at least have set of sides of money for tax. So I think profit B is great for, for that. Um I, I get back to the m it's a little tedious. I mean, I don't, I don't like one bank account, you know, let alone more than one and transferring the money when, when really a profit and loss statement with, with correct margins is telling us that. Yes. Right.

That's exactly what a well rounded profit and loss statement is doing. So. And then if we fall outside of those parameters, it's going to catch it faster than, and oh, my bank account's getting empty. I need, do I need to, do I need to allocate more or do I need to go talk to my vendor and get better rates? So, so. Right. So one is good at protecting us but the other one's profit and loss statement. It's not gap accounting. It's industry specific. Financial accounting is gonna give us insight, right?

Not just protect us, but it's also gonna lead us to making a decision one way or another of that. That's awesome. But I think, I think both, you know, I think everything is great out there. I mean, I read profit and for profit loss. What is it called? Profit? First? I cried in the beginning. I was like, oh my gosh, it's horrible. And his daughter gave him money like, you know, um so, you know, it was inspiring. Yeah, 100%. Um yeah, time and place uh for us as well like we, we started off with it, it was great, but then our needs changed.

And so um you know, we, we have to ship to something else but it's, yeah, it's, it's really great, especially if someone has zero system. It's, it's, it's good to have a sub system, especially like spending, right. You know, with this consumer culture and, you know, most, most Americans and a lot of people in the world paycheck pay this, this can protect the guard rails. But, you know, maybe as for business owners, maybe you're a bit more savvy and they might need something a bit different than, than that.

So um cool. So I think we're even closer in the podcast. So any, any last takeaways you wanted to make sure to share with everyone, any action items you wanted to give um everyone for that? Well, what's H vac financial freedom? Like what's been your main? How do you, what is financial freedom? What is H VAC financial freedom for, for you John? Yeah, that's no. Hey, you flip the script. Yeah. So uh for me it's, it's really freedom to do what you want with your time. I think that's really the, the crux of it. Right.

Money is just a vehicle. I think money unlocks energy to, to do more things and you know, this your, your business, your eight track business is just one vehicle do that. You know, we've had some guests on, on the podcast and now they, they, they built, they've sold companies. Um one of them actually took it on their yacht and we were just like chatting, enjoying life and um for them, part of their freedom was taking their daughters, you know, when they learn about things in school, you know, they learn about these far off places.

They would actually take their daughters there, um, you know, in the boat and go different places and see it like, with their own eyes. And, um, I think it's a beautiful thing. Uh, freedom, I think is different for everyone. But, um, but for me, I think a lot of the keys to that will be contained within your business, understanding the language of money and then really using that to get to where you want in life and only you can decide where, where you wanna go. It's, it's up to your mindset.

So um yeah, yeah. Flip the script on me. Yeah. So I mean the mindset because that's for me like freedom would be a cult, would be a culture of h vac financial freedom is having a group of people that, you know, you can rely on. Process that, right? It is there in a place that you have the freedom to make choice. Um go definitely do stuff with your family. I love um I don't love tedious work, but I love work. I love being around people and talking about work.

So, you know, for me to, to just be as much as I want to be on a yacht, to be on a yacht for like a couple weeks, I would be so bored, you know, stuff like do some stuff. Yeah. But, I mean, you know, Elon's financial freedom is different than, than other people's. So, yeah, but there is a number out there that it doesn't have to be so big that you're on the radar, you know, to be. Right. And, and that you can still be pretty much financial, financially, like, free, like, without doing.

Yeah, I mean, with owning good stuff on a, you know, like beach type stuff, right? I don't wanna say that number. It's in the millions, but I'm just suggesting if you have this number in the bank you could live pretty well off of it and you never really be on anyone's radar. Yeah. And I think, I think it's really, that's the freedom, it's the option to choose what you wanna do. I mean, it, it like, I, I have um, one of our clients, they, they sold their business and he was on the golf course.

I was chatting with him. He was like John, I'm getting so bored on this golf. I want to go back to work. I want to start another business, but I'm on, I'm on a non compute and so he's like, he's, he's itching to get back to words. Um, but then some people, yeah, it's like they want to donate their time to cause that they, that it's really important to them, you know, maybe involved with a nonprofit. So, but it's just like the option to choose. I think that freedom is, is like what we all want at the end of the day, like to choose not to have to do things because we have to do them.

Um I love the idea of uh being able to write, go out and kind of help others. Um We're, we're definitely gonna be sharing a lot more of what just the process, like really the maintenance side of it. Just what are the tedious steps that we, that we take so that other people can implement it if they want. But I was thinking about like you like mentioning, helping other people and my daughters right now, they watch baby boss. It's hilarious and they're, and he's, they're telling him and he's to work less.

And so he starts helping out and before you know, it, he's, he's running the ship and he's telling people about overtime and, you know, and just hard to pull yourself away. So, oh yeah, that, that just like that work out. He just gets moved into the nonprofit world. Right. Exactly. That's funny. Um But cool. So if anyone wants to get in contact with you, like how, you know, how are they gonna reach you? How are they gonna find more about you? How would they schedule a call?

Yeah, for sure. I mean, you can just email me Brett bre TT at high velocity Accounting um high velocity accounting dot com. That's our website, high velocity accounting dot com. You can reach me on Facebook. Um, most people see us there. Um, I always respond as quick, as quick as I can. Uh, we usually just set up a meeting if somebody does want to talk to us. Um, we usually talk for about an hour to get an idea of what's going on in the business. And if, if they want to make changes, um, you know, we, we give those options to you.

We don't. Right. Was it not options? Not, not a shoot. I give you options, not ultimatum. So, you know. Right. Um And it just depends on where you're at in your company. Um We can give you some feedback, talk about taxes, talk about cradle to grave and, and just have the conversation. But we love HV AC um plumbing, electrical home services getting into roofing a little bit, but at the end of the day, um HV AC is probably a little bit the most complex moving most items, you know, seeing the seasonality and that kind of stuff, but either way we love a conversation.

I love small business. I love seeing all these guys succeed. And ladies, men and women, sir, love that. Well, Brad, thank you so much for being so generous uh on the podcast, you know, the four MS and best practices you've seen from companies 10 Xing themselves. Um I think this is very, also helpful. Like I know a lot of folks have considered profit first and I think just that conversation really helped folks. And so for anyone who tuned in now, thank you so much. Now, let us know if you have any other questions and definitely reach out to Brett.

Um He does specialize in the HV AC industry. And so, you know, that really, that industry knowledge is super key just having them like, you know, your family accountant who, I don't know, there's a generalist and they just been doing your books forever. So definitely reach out no obligation. And with that take care everyone. Happy Memorial Day weekend. Yeah. Have a great Memorial Day weekend. All right, bye bye. Thank you for joining us for the H VAC Financial Freedom Podcast. Follow us on Stream Yard Apple podcast, Spotify, Amazon Music and check out our main website www dot H VAC financial freedom dot com to find out how you can also achieve financial freedom.

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