Are you a struggling entrepreneur who can’t find that missing key to your success? Perhaps one of those will be discussed in this episode! Pam Jordan is a no-nonsense financial expert and a speaker who manages over a billion dollars for entrepreneurs. Today, Pam joins Merrill Chandler to share seven simple strategies you can use to skyrocket your own business. Most entrepreneurs don’t know about these strategies because they haven’t had the level of experience that Pam does. Jump in the conversation…and learn from one of the most strategic minds of today!
Watch the episode here:
Listen to the podcast here:
7 Simple Strategies Most Entrepreneurs Don’t Know With Pam Jordan
Learn How To Put More Money In Your Pockets
I’ve gone through my share of accountants, tax preparers, and strategists. I’ve talked to dozens of people who are subject matter experts…but could not necessarily relate to me and my business model. I’ll let her speak to this. She knows all about how to address the fog in between black and white…also known as the IRS code. This is standard operating procedures for accounting. Pam is a genius at navigating these particular waters, and it’s time to introduce you to her.
I am with Ms. Pam Jordan, who—over the years—has become what is known as a Fractional CFO. I thought that was a cool term, because (you know me) I’m a nomenclature. I’ve invented an entire lexicon of terms surrounding fundability™. I’m having Pam on here because not only does she have an interesting skillset, but a compelling perspective on the #EntrepreneurLife as well. Entrepreneurs are a rare and sometimes quirky breed of businessmen and women. A lot of the times, people have no idea whether something should be more associated with the personal or business side of things? I don’t necessarily have a business…instead, I’m a sole proprietor, an LLC, an Incorporation. So how do I accomplish my accounting? It is a mess for those of us who are still dealing with our W-2! We back into making our hobby a trade…and the conversion into a real business. That’s what we will be talking about today. Pam…welcome to the show!
Thanks, Merrill! I’m super pumped to be here and chat with you.
I’m going to let you speak the truth about how all of this comes together. Pam Jordan is a no-nonsense financial expert who analyzes and streamlines the backend of fast-growing companies, efficiently creating more profit and strategic growth. I noticed though…that it doesn’t mention accounting anywhere in there. Talk to me about that.
We are profit-driven, and usually look at the bottom line…profit with precision. I am an “accountant” but don’t hold that against me. I have my MBA and everything related, but I am different because… A) I’m fun! And B) I think like an entrepreneur because I am an entrepreneur. I don’t think like a CPA who’s trying to fill numbers into forms so that you can tell the government how much you owe them for giving you the wonderful opportunity to be an entrepreneur.
My tribe is acutely aware of what we call funding landmines…things to avoid while you traverse the funding field. You’re in way better shape than 97% of every other entrepreneur out there. I’d like to cover some of the huge accounting and/or business management landmines that you run into. But first, tell us how you got to be where you are now and why this is your passion.We all need advice about running a business. Click To Tweet
First…I’ll tell you a quick story about me. I went to college thinking that I was going to be in non-profit, saving the world and helping people. But it turns out…about a year in, there was a budget cut because nonprofits needed the money and they didn’t have any for my position. So instead, I went into corporate. And there, I realized that I could still help people in many ways without being apart of a non-profit! So I began the journey of working in corporate. I helped grow the company and received lots of awards. But then…I met a greedy salesperson, and it went downhill quickly. It’s because of this that I got to learn and experience what bankruptcy looks like. I was able to protect the owner, along with all of his assets so he didn’t have to file. But the company still closed. And at the end of it, I looked around and realized that he had everything. I protected his home and his $1 million worth of assets…but now I was out of a job, and still had my own expenses to pay!
So you came to the awareness that, while you were covering everyone else’s ass, you were still having to grind out a paycheck for yourself. Does this sound familiar to any other real estate investors or small business owners out there? You’re putting in the work…but other people are taking the win! This is why many of us turn into entrepreneurs.
Yeah! After I started to venture out and scheduling interviews, I finally got a decent job offer. The gentleman showed me his five-year plan, which included buying a plane. And at that moment…I declined the job, walked out, and said, “I want my own damn plane!” Now, don’t get me wrong. I don’t have any kind of private plane in my near or distant future…but I was sick and tired working or someone else and building someone else’s legacy! Soon after, I found out about Fractional CFO work and discovered that I had already been doing that my entire life. And it would be a fantastic job, because I could help out tons of companies instead of just a few here and there. So I started my own company, and at just six months in…I was making more money than I ever did working for someone else.
Isn’t that the truth, though? Working hard for someone else can be tiring. But when we have the drive to work and grind for ourselves, there is suddenly an entire new game being played.
It was a whole new ball game! After starting the company, I got to help lots of people and grow. I added my own team members and all these other things you’re supposed to have when you’re a real company. And the biggest benefit is that I’m the Fractional CFO!
That’s one of the things we all deserve…a Fractional CFO!
Getting A Fractional CFO
Everyone needs a Fractional CFO…whether you’re a new startup or a $20 million company. No matter what, you still need that level of advice when you’re making important business decisions. Having a Fractional CFO adds a layer of security and reassurance. Now, most entrepreneurs hate financial reports and numbers. They don’t want to look at their P&L and everything related. Having a Fractional CFO makes it so that you don’t have to because they’re already taking care of it.
This is the decision that will take you from being a regular entrepreneur to becoming an entrepreneur with a legitimate business. There’s a threshold that every single one of us cross. For some of us, it could be $200,000 a year in sales, while for others…it is $20 million. How many of you use real estate investing? You’ve flipped once a year, twice a year, maybe even three or five times? But it’s still not a business. You’re flipping houses, you’re buying and holding, but you aren’t necessarily running it like a serious business. Whether you like it or not…we all need advice about running a business, not fixing and flipping properties. Could you speak on that, Pam?
Entrepreneurs start a company because they’re good at fixing, selling, or servicing something. It doesn’t mean they know how to run a company. I deal with a lot of real estate investors that are great at flipping houses. They’ll go out, pick a good deal, make it look shiny and pretty, make some money off of it, and then proceed to roll onto the next one. But how many flips do you have to go through until you have a business and company money coming into the accounts? You’re not just the technician of things…you’re actually running a company, and you need to act like it! We work with a lot of these companies who are at a point where they realize that they aren’t playing anymore, and that high six figures are hard. They don’t know what to do next.
I love that you said that, because I ran into it myself! I always used to say that I didn’t want to become a CEO because of the fact that I’m a subject matter expert. I didn’t believe that I could do both until I started to surround myself with an advisory team who could build my intelligence, and make me discover that I don’t need to be an expert in all of these subjects. I just have to build a team of those experts instead. What are some of the things that you can guarantee in this transition that my people have either done, or are likely to do, unless they read this blog? And it doesn’t even have to be in the order of the size of the landmines.
Get A Company Credit Card
There are lots of patterns that I’ve seen over and over again with entrepreneurs…and these are in no random order. First, a huge landmine is not having the separation of church and state. Your company is your company and your personal is your personal. Often, I come into seven or eight-figure companies with growth sales, and they’re still using personal credit cards for business expenses. Everyone should stop doing that as soon as possible. Get a company credit card and bank account. If Uncle Sam comes and knocks on the door…and you’re treating your personal account like business account and vice-versa, then so will they. They will own you on all levels! But if you treat your business like a business and your personal like a personal, there’s not going to be a crossover. Once you start making money, get a business credit card and get a business checking account.
That’s the very first thing that we talk about with our fundability™. We teach that 80% of all business credit cards, business lines of credit, and business loan decisions are based on your personal profile…not the business. You can’t mix the two. Now, they are aware of a couple of things, like leasing a business credit card. But make sure that the bylaws and the articles of the organization/operating agreement allow for it…and then make a notation. It’s the equivalent of a journal entry saying that they have done so in the past. But that is way more technical than just getting a card in personal for your personal and a business for your business.
Know Your Numbers and Outsource What You Can’t Do
Another one is not knowing your numbers. If you don’t like accounting, that’s okay. Outsource it. Find someone who will get it done happily and add them to your team. I suck at marketing and boosting posts on Facebook and SEO, so I simply don’t do it. I have other people (either contractors or my team members) work on it instead. If you’re fantastic at flipping houses, no one expects you to understand a P&L and reconcile, but they do expect you to have someone that does! I’ve worked with a house flipper down in Florida. She did $1.6 million in 2020, but she hasn’t tracked her numbers in years. She’s now in a world of pain because she doesn’t know where she is with her numbers. She’s got IRS knocking on her door and she needs to scramble to get money and funding. She has not been through Merrill’s course and, because of that, is stranded. This isn’t a hobby for her. This is a bonafide company, and she doesn’t know where she is with it at all. Figure out your skillset. And if there is something you can’t do, simply find someone who can.
In one of the groups that I met through BA, I was introduced to a group called The Multiple Club. And one of the take-homes that they drilled into me is to fall in love with your numbers and court them. They told us to find a way to make them more beautiful, and create more so that they are better than they are now. It’s almost like nurturing any type relationship. Here’s the thing…I’ve been doing this for so long. And the reason why I brought Pam on here is because I found out that we knew how many sales we had in a month. We knew how many clients we had funded and what the fundings were, but past those top-tier numbers, I couldn’t tell you all the click-throughs and the passes at the cost per-acquisition. I didn’t know what it costs to make you my client. I have no freaking clue. But now that she’s involved, like this woman down in Florida, I’ve had to come face-to-face with the fact that I don’t have a relationship with my numbers, much less a beautiful, blossoming love affair. That is what we need to make this work!
Know Your Passwords
Another important fact is to know your passwords. More than once, I have seen people grow companies and add people to their team, but then lose control of the passwords to their bank accounts, software, email lists, etc. If something happens and a person walks out, so does your passwords. I had one person that couldn’t use the manufacturer. He had a book-keeper for over ten years with a well-established company. She retired, but not on good terms, and took all of the bank passwords with her. It took him one and a half weeks to get the bank to redo his usernames. He had no idea how much money he had, because he was too reliant on this one person. Build a team, but use things like LastPass and other softwares to make sure that they can get to what they need to, but if they walk away with your passwords, don’t.
I can attest to this, guys. I now use the LastPass because this point of death was foisted upon me by my partner and our COO, Jessica. She told me that if I don’t do this, I will die! Because we used to have the same password for everything until she installed the LastPass. Now, I don’t have to know anything. I only have to know the one password to get into LastPass, and that’s all.If you can't do it, find someone who can. Click To Tweet
The next one is not paying yourself. Often when entrepreneurs and business owners are hustling and bustling, they forget to take care of themselves and even pay themselves. This is where the intermingling comes in. With money coming in, you need to pay yourself. Take it out of the company, transfer it to your personal, and live your life. There’s a mindset for some reason that we should work our ass off and get nothing in return because we’re the entrepreneur and we should work 80 hours a week without getting paid.
That’s one of the problems that I’ve had. The vast majority of my clients either have or will be transitioning from a W-2 to full-blown, full-time. I’m so glad I’m not the only one telling my tribe these key factors. The reason why we left our W-2 jobs is because we aren’t getting paid for the value we were creating. Like you said, you want your own plane. You want your own kibble. You want to work for you. Our programming tells us that it’s okay to not pay ourselves because it’s our company. But that is not good logic. It’s okay to harvest money off the fruits of your labors first because that’s why you went into business in the first place. Do a little deeper dive on that and share your perspective, because I don’t want to give away what you do for companies.
I have a tool for cashflow management called Profit First, and it’s based on a book by Mike Michalowicz. It’s a cashflow methodology and a way to handle your money. Typical accounting says, “Sales and less expenses equals profit.” You took the risk to start the business, to buy that property, to scrub the floor, and at the end of the day, you’re just hoping that you’ll get some crumbs in return. That’s not how I want to live my life. Sales and less expenses equals profit means that you’re paying yourself first.
For every dollar that comes in, a percentage of that comes off the top. We recommend that part of it goes to profit, part of it goes to tax, and part of it goes to the owner’s pay, which is your salary. Because if you don’t pay yourself first, you’re going to get very little reward. We use the Profit First cashflow methodology, and I’m certified in the process. We walk our clients through the way we do it with multiple bank accounts. Think of it as the envelope system, but with bank accounts.
That’s how I was raised…with our envelopes. That’s also how I started it with my kids.
Yes! It’s having multiple bank accounts. As money comes in from doing a deal, you put some into profit, some into tax, and some you into owners pay because you want to get paid! The rest is based off how you decide to run your company. A lot of people think that they need all of their money, but that is not true. Because if you’re forced to have a smaller amount of money, you will figure it out. We work with our clients to figure it out, because you can easily take 1% to 10% off of your expenses with two hours worth of work.
For a better part of six years, Jessica has been on my team…and she is a profit-first maven. She loves it! It runs her entire personal life on Profit First. I’m sitting here, being Mr. Subject Matter, doing my thing…but not running it like a legitimate business. This is when Jessica started squirreling away savings for me. She didn’t even tell me a thing, she just got to work. It’s like 5% to 10% of the deposits that we do off the top line.
A few years ago, she told me that she had a surprise for me. When I asked her what it was, she showed me an account and told me that it was my savings. She is an amazing team player, and like you said, a huge part of building your business is surrounding yourself with people who will have your back no matter what. They’re watching for your blind spots and already knowing what you don’t do well so that they can do it on your behalf. Any stories or examples of how this saved somebody’s ass?
I have so many stories about how Profit First has totally saved people and their business. One is about a gentleman. He is a trainer, and has had a business for years that helps people get lean, mean, and everything in between. He has lots of employees and contractors, but has never paid himself because he just accepted whatever was left. He paid his employers but had hardly anything to take home. We implemented Profit First and within a month, he was paying himself and even setting money aside. It was fantastic. He was able to finally pay himself and contribute to his household, taking the load off of his wife.
Especially since there are power dynamics in almost every relationship. If somebody’s been carrying you, at some point, they’ll either get tired of it or even hold it against you. I’m always on the nose about this stuff. Guys, please understand that the better you take care of yourself, the better you can take care of everybody else. A full cup can share, but an empty cup can’t. This can apply to any situation emotionally, spiritually, mentally, and especially financially. If your cup is empty because you’re not taking care of yourself, it might be used against you. You’re going to feel the regret and shame of not participating in your relationships, but remember how good it feels to put you first. I don’t care what your jam is. What I do care about is that you are the superhero of your own story. The company isn’t the hero, you are.
I have another story about a guy in the digital sales space. His first year in business was in 2020. He went out on his own, leaving the family business to start this up. We started Profit First during his second month in business. Out of the gate, we were implementing this process. Because of the product he sold, and the IP that he held, he did $2 million in his first year. All of us want to be that guy. On a quarterly basis, we complete profit allocations where, whatever is in the profit account, part of it goes to your pocket for what you want. There’s a whole formula of how it works. The bottom line is whatever’s in the profit account…part of that is going into your pocket!
Because it was their first year in business, and they were a young couple that just had a baby, they were under a lot of financial stress. I asked that she be on that call when we did the allocation. I go through the normal humdrum, and she was screaming because she had no idea that we’d been setting that money aside. It was about $30,000. With their second allocation, they were able to do their down payment on their house with the profits from the company. It’s crazy!
The other guys are smaller, not really dealing with big numbers. But he always wanted to take his wife to a nice dinner and stay at The Ritz-Carlton…even though they’re Hampton Inn kind of people. After we completed a profit allocation…he surprised his wife and they were down in Miami at the Ritz-Carlton and stayed for the weekend! He Finally got to achieve those financial goals that he had never been able to do before. For him, that was a huge win! All of the time and effort that he put into his growing company finally paid off, and he was able to bless his wife with the rewards.
I’ve had other people pay off hundreds of thousands of dollars in debt because, by doing the Profit First system, you’re paying yourself first and putting money aside. If you have debt, that money should go towards debt. Personally, that’s what I did. We paid off all of the debt on the house, cars, the loans, credit cards, everything! We went out to dinner that night and opened a bottle of blends. That was the best dinner because we got to celebrate climbing out of our debt…something that we were looking forward to for a long time.
That is an amazing feeling! One of the atomic truth bombs she’s dropping on you guys is that Profit First allows you to coordinate debt payments and anything else that’s happening for you. Remember that if you have 15%-22% credit card debt, and you end up paying it off, you’ll getting a 22% return on your line. You’re getting paid interest because you’re shaving all those costs off. You need to connect these dots before it happens.
That’s another take-home message for what she told you…because knowing how to pay down that revolving debt and implementing your strategies to do so will make your fundability™ skyrocket. But you can also save gobs of money on interest. That’s the return on investment for any dime used to pay off your interest rates. Those are great stories, Pam, and there’s a lot to talk about. It’s another huge landmine that’s easy to land on, so it’s important for our people to understand it so that they can avoid it, or at least be conscious of it.
Know Your Worth
I’ll make this my last one…and it is to know your worth! As a business owner, entrepreneur, etc…know what you’re worth per-hour, because if you are worth $150-an-hour, you don’t need to be doing a $20-an-hour chore. I find business owners who are amazing at business development, building their tribe, closing deals, and so on…but they’re doing things like administrative tasks. This is when I always ask them if they know their worth. You can outsource less important work like that. I can immediately put more money on the bottom line for them and in their pockets by helping them to stop doing those low-level tasks, and instead focus on the projects that the owner or founder should focus on, since they are in fact the business subject matter expert.
As I mentioned before, surround yourself with people who can help you with your shortcomings and weaknesses. My take-home from this is that you should only be doing things within your professional skillset on the business, strategist, visionary and relationship-building side of things. The smaller, lower-level tasks should be completed by somebody else, so that you have the time to focus on more essential aspects of your business! Why spend your work day concentrating on $20-an-hour tasks that keep you from building relationships that could be worth hundreds of dollars per hour.
Pam…thank you so much! I’m excited to be working with you myself, simply because you bring a level of expertise that I don’t have. The last thing I want you to share is your philosophy of accounting. The reason why I’m working with you is because of your ability to navigate the fuzzy logic of the IRS and other accounting protocols. What are those priorities? And what do you find important when you’re making sure that people are prospering in the system…rather than being stepped on in the system?
My perspective is very different than most accountants and tax preparers. They usually only tell you what happened. They’re looking in the rearview mirror of your company and saying, “You missed your exit 2 miles back! This is what your report says! Go pay Uncle Sam this! Peace! See you next year!” But they’re not telling you actual helpful information. They’re only focusing on your history. In contrast…with our clients, we take the information about where you’ve been and then tell you where you’re going. We look forward out the front window of your company to ask, “What are your goals? Do you want to do XYZ? We’re going to reverse engineer that to make a plan. We’re going to make the roadmap to that exit or whatever else you want. We’re going to help you get there, and hold you accountable so that we don’t chase the shiny squirrels that all of us entrepreneurs usually come up with.”
It’s a matter of knowing where you’re going and having a plan of how to get there so that you do in fact make it there. Sometimes that means we need to pay a little bit of tax because—down the road—we’re going to get tenfold for it. We’re going to play this game over here and not pay any taxes because we have time to. We need to focus on XYZ. It’s a matter of looking where you’re going and not where you’ve been. Of course I care about where you’ve been, but I am a lot more interested in where you want to go…and the steps we can take to get you there!Remember to take care of yourself. Click To Tweet
There’s a familiar language in there. The whole point is having somebody there in the navigator seat who can point out and update your skills in the terrain. The map is a snapshot in time of your movement towards success, fundability™, and creating the life you love. A map doesn’t serve the terrain, it only describes it from a distance…usually from a very high perspective. The coaching, support, and ability to create the navigator in the middle of the terrain, where the floods are happening, where the snow falls, etc. is completely bombarding and killing my entire Texas team.
That’s why you guys have me as a guide! And that’s why I have Pam as a guide…because I want to know the fastest and easiest ways to get where I want to go. Pam, you have a unique set of skills, and like you said, “Take what’s behind me and project that out into the future to help me do it the right way.” That is everything to me! Any final words for my tribe? If they wanted to know more about you and/or see you at your finest…how would they get ahold of you?
My personal website is PamJordan.com. My company is PivotBusinessGroup.com. My social is @PamJordanCFO. We focus on helping you turn to profit and figure out what’s going on with your company so that we can assist you in creating that roadmap to get you where you want to go.
Build yourself a team. Think of it as the pit crew…you’re the driver, and you need to pick your pit crew. That is the bottom line, and I’ve chosen Pam to be apart of mine! For my final words…make sure that you do take care of yourself first, because when you take care of you, your cup is full to take care of your loved ones and anyone else in need. Those are our first and most important priorities, so make sure you build a team that helps you do that. Thank you for joining us, and thank you so much, Pam! It has been a delight having you here and we will see you guys on the inside!
About Pam Jordan
Love the show? Subscribe, rate, review, and share!