Joe Troyer
Hey everybody, it's Joe Troyer, and welcome to show me the nuggets. Today we have a guest on that I have known for man I think close to 10 years. So today's guest is Michael Tasner. Michael is from the greater Buffalo New York area and has really been around as a business growth specialist since like literally, I was probably just getting started in the space. He's the founder and CEO of no joke marketing. He's got a full service agency, as well as serving the child care niche, done some really, really fascinating things. And he's also involved with profit first, and so I'm super excited to bring Michael here today. He's built a seven figure agency two times in a row, and no joke marketing took about two and a half years to hit seven figures with a full blown team and we'll make sure we dive deep for you guys today. So without further ado, man, Michael, welcome to the show.
Michael Tasner
Thank you so much for having me. It's been a pleasure and it was crazy. I remember way back when when we originally connected online and surely has been a while and it's great to get the chance to reconnect and see all the fun things you guys are up to.
Joe Troyer
Yeah, man. Same. Same for you is like it had been so long. I recognize you right away when we ran into each other and I'm like, How do I know that name and actually went back and looked Inside my email, I found something from like 2007 2008 where we had been communicating and I was like, wow, that that is absolutely crazy. Such a small world
Michael Tasner
definitely is indeed.
Joe Troyer
So, Michael before we dive deep, but can you give us some of the highlights and how you ended up in this space?
Michael Tasner
Sure. So I guess it's a little bit of a fun story when I was 15 I kind of realized that I wanted a little bit more in life and what I mean by that, and it's no offense to my parents, but middle class family, I mean, they were they're both them in blue collar work for the union. And I, we were able to get by, but we were never able to have any of the extras we were never able to have. I mean, take nice vacations and I mean, a lot of things were hand me down. So I started looking at how can I make some extra money and first I started off working at a drug store used to be called eckerd, which got bought by either Rite Aid or CVS or one Have those I was like stocking things in the back and making I don't know what it was like $5 an hour. And after I'm like, got my first check out, it was like $74 I'm like, this is not gonna, not gonna pay the bills. So we had a meeting with our tax lady, her name was Wanda gates. And she just was like, kind of rambling. And she's like, I want to grow my business.
And my parents are like, Oh, my son knows how to do websites. And I actually didn't. So she's like, Oh, do you want to do a website? For me? I'm like, yeah, yeah. Okay, great. I'll get it done. So she says how much and I said $1,000. And she's like, okay, and she literally wrote me a check for $1,000 on the spot. And I took that and like, okay, now I better figure out how the heck to get this thing designed. So I went to the local library, way back when you could look at books that had CDs in them.
So I mean, those old fashioned things. So I found a book on Microsoft front page, and I literally had the license for Microsoft front page in the back. I popped it into one of the computers there. And literally they had like all these templates so I just literally built it some terrible web copy like I could, I mean at 15 I barely could, like I didn't interview her or anything I just said like, Yeah, well, I do taxes and I'm like, Okay, oh, now I need a domain name. And at the time, I mean, this was I mean, almost, yeah, actually over 20 years ago, but I probably could have got like, accounting tax car or taxes calm at that point, but I grabbed In my opinion, what was the best domain name ever? And it was the stupidest name ever.
I want to do your taxes calm. Like the hell this is like this alliteration on her name and like, Oh, this is freaking brilliant. And she's like, Oh, I love it and had like the little animated GIF of like the You've Got Mail like it was the cornea site. But I had made $1,000 and so this is great. I wouldn't open up a bank account, I wouldn't got a DBA. At the time you had to be 18. So my father who has the same name, except he senior, he signed it. I wouldn't got it framed, put it up in my bedroom.
And then I just started learning everything I could about kind of design and not at that point, not marketing. But it's still to this day, I can't design a website, everything that I did for the first couple of years, and it was all old school front page, then I kind of graduated to Dreamweaver and thought I was like the best thing since sliced bread using this fancier program and a little bit of HTML. But I just relied on templates, because back then you could get away with slapping a template up and grabbing a domain name because everybody wanted to be on the web. So that's kind of how I got my my first, I guess, first experience in design, slash development and then just kind of continue to morph it from there, and really started to focus more on the marketing.
So as trends evolved as I realized that can't compete against professional developers or I mean people that have graphic designers and I was just hiring kind of random freelancers as needed. But through college, I was just cranking out websites for a couple thousand bucks a pop, which I mean at the time was insane money and when you're in college and everyone is completely broke, and drinking Keystone like beer, and I'm cranking out websites at to 3000 bucks a pop and my monthly bills are like $500 to get all this extra money. So just kind of was living large, at least I thought so.
That's kind of the the short version. But I just continued to evolve continued to continue to pivot continue to learn from other people. I joined a couple of masterminds to kind of learn from people that were more successful. eo is one of the groups I joined entrepreneurs organization, great group of guys and girls, learned a lot there and just kept kept hustling and trying to do Whatever I could, essentially.
Joe Troyer
So fast forward to today, tell us what business or businesses look like, what are your focused, where are you spending your time?
Michael Tasner
So I ended up selling the first agency give or take five, six years ago, and I sold it because it literally ran me into the ground. So like, I wish I would have known everything that I know today. Like I was working 8090 hours a week, like so we hit a million dollars and that was a great milestone. And that was that qualification you needed to get into the entrepreneurs organization. So I was like living large and living high rather, but it just kept catching up with me of like, the sleepless nights the might have to throw payroll on my Amex card like I was at the time I was using kind of bank account, accounting like logging to the bank account. Great. There's 50 grand in here. I'm rich, like this is awesome. And then, oh crap. There's three payrolls in this month. And yeah, the MX bill is due tomorrow.
That's 25,000. And so I decided to pull the plug and I sold it for for nothing close to what I should have gotten due to my inexperience regretted it every day. And once my non compete expired, I started up no joke marketing. And that is really kind of all about. My fundamental belief is that the most important function in business like it's Peter Drucker says marketing and innovation to marketing it is, in my opinion, the only thing you need to be focused largely focused on, if your marketing is poor, if you're not generating results, you're going to be sunk. So that was kind of where the name came from.
And initially, I was kind of up to my old tricks of being a generalist agency. So my first agency was, we had, I don't know, 50 different clients in 50 different niches. So we had like there were there was no rhyme or reason we had an auto dealer. We had a credit union We had one of the biggest financial advisory firms, which I just believe got sold to like Goldman Sachs, like all these random clients, and we but when they when I realized this, we never had a repeatable process in system to actually deliver the results 100% of the time, so that's why I was having to like, fight fires all day. So no joke marketing started off as kind of a little bit of a marketing generalist agency and I kind of looked at, how can we kind of start making making some bread so to speak, but then we really morphed into a couple of niches.
So no joke marketing is kind of the parent company. And then we've got local childcare marketing. So we work with a couple hundred childcare centers and kind of doing their paid traffic, redoing their websites doing their social media, but largely paid traffic and focused on driving enrollments. And then we also work in a couple of other niches, but childcare has been the big a snitch, and one of the I since the show and has the word nugget in here, one of the things that I have been aggressively looking at, especially now is growing through acquisition. So the childcare business was an acquisition of someone that I had met that wanted to exit that business.
And then about six to eight months ago, I bought another company in Vermont, that does design and packaging work, but we've been looking for is not just to get into other niches, but rather looking for acquisitions that have really good people. So like the design acquisition was a really, really tiny company. But they had two graphic designers that were in my opinion, well underpaid, and they were doing design work that was just off the charts. So I bought that more for the talent. Yep, so that's kind of how we've been focusing on growing is to try and find some companies that could use some help or self Partially people that were like me, five to eight years ago, I'm just burned out and they want to pull the plug.
Joe Troyer
So you said to two brilliant things there, you talked about niching down. And I want to make sure we talk about that a little bit. And then you talked about growing through acquisitions. And I definitely want to break out on that a little bit as well. So when you think about niching, down and you think about your your first agency versus now and what you're doing with childcare, what do you think niching down has afforded you to do like, what what are the benefits at the end of the day, because I rant and rave about this all the time with agencies that I work with.
But it's always nice to hear somebody that's actually has an agency and they're, they're reaping the benefits and the rewards actually give give their perspective, instead of me just saying, Yeah, you should niche down.
Michael Tasner
Sure. So I mean, with the first agency profitability was among the biggest weakness, and the reason that we never could really continue to sustain profitability was that every time we got a new client We were having to invent a completely new process. So there if we were doing Google AdWords, we were having to research the industry we were. So like, when we got this big financial advisory firm, we knew nothing about FINRA compliant like all these. So like, we thought we could write ads that said, firm is gonna help you make 20% a year without any.
Like, we didn't thankfully run those, like when we submitted our first set of ad copy, and the VP was like, This is none of this, I can get your compliance and I said, What do you mean compliance, said, and that kind of started to show our inexperience so we were constantly reinventing the wheel. So the beautiful thing with having the niche is that you have repeatable ads that work you have repeatable copy. You have testimonials and that same niche because now more than ever, people are feeling like they're going to get burned constantly.
Almost everyone that we've worked with has worked with an agency before and usually they say, I had a bad experience. So show me other childcare centers you've worked with. Show me I want to see some of that. But the other thing that without getting too techie is that obviously that whole facebook pixel, you're gathering all that data. And you really become more of a data engine and you're able to leverage artificial intelligence, you're able to build a master pixel. I mean, a lot of things that if now all sudden you're working with 100, landscapers, for example, and you've got all this data, you're able to start to see, well, what are the ideal prospects look like for all these different landscapers and leverage that data so you get your ad cost down.
But you can also start generating results faster. So rather than it taking so when we're launching clients that weren't in the niche I'm in it might take 45 days to get up and running, if we're having to do all the research, figure everything out from scratch, whereas if you've got 100 clients already, or even 10 clients, you're putting a couple of buttons, you're taking stuff live and you're already driving stuff through Facebook, through Google etc. So it definitely from a profitability stamp. point from a quality check standpoint. Because if you're not if you're taking clients in all different niches How do you establish benchmarks, you don't know if the lead should cost $50 or if it's $500 lead because it's a bankruptcy attorney, I would have absolutely no perspective unless I was leveraging someone that's already been in the industry.
Joe Troyer
So what you just brought up there at the end to lead cost and lead quality is Uber important right? And unless you've been in a niche for quite some time, there's no way for you to really know what that's supposed to look like. And I find that most marketers then rely just on what the client says the equality said look like this phrase should look like this or and and they only know their campaigns, their results and what their kind of goals are they don't understand what's happening in other states and other cities. They don't understand you know, the the market as a whole, like an expert like yourself, entire child care what
Michael Tasner
exactly and it's it's one of our Biggest competitive advantages that I mean, I'm able to say very quickly that we know your industry. I mean, we know what things should cost. We know how long it takes, we know the seasonality. And a lot of us, myself included, have shiny object syndrome, especially when COVID hit one of my first reactions, and I started going down the path until I caught myself was I need to add another niche immediately. So I'm like, Well, what are the niches that are recession proof or that aren't affected by well, medical and attorneys? But I'm like, why wouldn't we want to double down and continue to serve the clients that we're already working with?
Because now they need us more than ever rather than us kind of not turning a blind eye but just because some of them are really struggling and a lot of childcare centers. They're getting hammered right now. And it's not an easy time for them, but it's the singing can last forever. I mean, it's we're going to come out of it and so I'm Made my same mistake again. So I think history sometimes repeats itself but I, once I started telling my team that like, hey, let's pick another niche and let's start doing some lead gen like what are you talking about? You need to stop that. So I'm glad they they cautioned me on that and taught me right in my tracks.
Joe Troyer
That entrepreneurial ADD will get the best of us all done exactly. I'm curious what what are your packages typically look like in terms of sounds like you do a lot, right for one price.
Michael Tasner
It's the the industry and unfortunately his investments are pretty low. One of the challenges in childcare is that most of them are not doing any kind of marketing prior so they don't see it as an investment. They see it as an expense. And they tend to run very lean as well. A lot of these centers. If they're a single location and they've got ad enrollments they might be doing 700,000 a year for example, it varies drastically that could be charging $600 a month they could be charging 1500 a month. They're real high end center. But usually the packages in this lowest package 1000 bucks. And then if they've got multi locations, it goes up. I mean goes up from there. But we're typically focused on selling, going to leads on demand enrollments on demand, which is our paid traffic stuff.
So that usually is where we like to start the relationship. They need everything. They need citations, they need to read management, they need citations, like they need all of that stuff, heavy SEO, but they until we start to show them here are some families that want to work and then they start to enroll those, it's a really, really tough sell unless they have some money to burn, which usually they do not. So that's typically our package with other niches that we've worked in our packages usually start at the two k range. So try and keep that a little bit higher.
Joe Troyer
So packages right out of the gate, that are extremely Lead focused, pretty lean to show them results, show them that you guys are different that you're the real deal. So that you can obviously upsell them and move them down the path.
Michael Tasner
Exactly. And we go as far as guaranteeing leads. I mean, that's not easy for an agency that's not in this niche. So we know based on certain ad spend based center formulas and how many leads, we can drive with ad certain ad budgets. So that's the other piece is the guaranteed leads that usually will will help seal the deal. But it's been a little bit more challenging with COVID. But we're still able to generate generate the leads for them.
Joe Troyer
Yeah, and that makes perfect sense going back to your pixel, right, if your pixel master pixel wasn't trained, and and you weren't in the same niche, there's no way that as a business owner, you would feel comfortable making that guarantee Right,
Michael Tasner
exactly. Like I if I were to go and approach an attorney and say, hey, it's $10,000 a month, and I'm going to guarantee you 100 leads a month and there's oh my god That's insane, we close one of those, it's worth a million dollars. And if not, I'll give you your money back, I'm probably gonna be having to cut them a check for 50,000 or whatever they paid me. So it's kind of stay in your stay in your lane mentality, essentially.
Joe Troyer
So I want to jump over to acquisitions and growing through acquisitions. I'm curious. How'd you end up in your first deal? How'd that come about and share what what you are willing to do?
Michael Tasner
That one was a casual conversation. And it was was mentioned earlier that this gentleman might be looking at selling. So I just shot him an email and said, Hey, you wanna have a conversation and see there might be a fit. And we just, I mean, had a beer and lunch, I believe, and then just kind of continue the conversation. My approach to acquisitions is, is probably different than most. I like to work very, very fast and I like to do that. For several reasons, but I believe that deal came together in well under a month, probably closer to two weeks. And when I'm saying came together, I mean, signed and done. So we've got a, I've got a pretty tight system, that once I kind of find someone that's interested that I can size up pretty quickly, what kind of deal Am I going to propose? The downside to acquiring agencies is that they're insanely risky. And especially for probably most people listening, I mean it, if you're looking at acquiring or even if you're looking at selling if, if you're one of the main attractions, if you're the account manager or you're doing all the sales. It's not an easy sell, because when you're gone like when I sold my agency, I was doing every single strategy call for those 50 clients.
So that's why I was working that 80 hours a week because that I kind of sold myself. So I wrote Book way back when and a lot of people read the book and they're like, I want to hire the guru or whatever that that wrote this book, and I don't want to work with anyone else. So when I sold that, I mean, I had to downplay. And I let them know that I was doing a lot of these calls, but I had to downplay that the transition, but I didn't know is that it was a wild card. And that's why they structured the deal like they did for me was that if a lot of clients left, I would get very, very little. And sadly, that's what ended up happening. So, I mean, I look to try and mitigate my risk with agencies largely it's going to be an urn out. And that means that it let's just say simple math, you're doing $100,000 a year profiting I don't know, let's say 50 grand or something like that.
You might say, well give me one x my sales and there's lots of I could talk for hours on how to value an agency, but there's lots of valuations. You can value them typically by earnings, so the profit, but then there's obviously lots of other things to look at what profit of AI is the owner paying has his or her cell phone in there? are they paying their kids? And so there's again a lot of variables. But if it made 50,000 and you say, well, Michael, I want 100 grand, say, okay, that's great. However, if all these clients walk out the door and I give you $100,000
, come month two, I mean, I just lost $100,000 or 90,000 minus the one month of sales, for example. Yep, give or take. So, I tend to to look for a deal that I can make it work on the other side. And that's, that's not easy to find. My preference, candidly, and these are even harder to do is zero down acquisitions. Yep. And that is, that doesn't mean zero down from any cash that's zero out of my pocket. So whether that's leveraging SBA loans, which are going to be huge, there's a lot of really crazy programs, not referring to any of this stuff with the paycheck stuff for the dl but rather, SBA loans are saying I believe it's like the first six months of payments, they're willing to waive that new acquisitions, they'll fund 75% of the deal. So if I was coming at this agency, fine, I'll give you 100,000, which I wouldn't do $100,000 in sales, but they would fund $75,000 of that.
So now what you could do is say, Okay, great, I'll give you $75,000 down, and the other 25,000 that you want, I'll give you, whatever, $1,000 a month for two years. And now you literally you bought this agency with SBA money, which obviously has to be paid back, the owners financing 25 Grand 00 out of pocket, you know, having another agency. So it's and for me, it's fun. I don't know, I like I get more out of just analyzing agencies because obviously you have to sign confidentiality agreements, you're not going to start soliciting to clients, but it's fun to see what their margins are. It's fun to see what software Tools they're using. It's to me it's actually been more fun in the deals that I'm not buying to look at. And I'm looking at agencies that are five times the size of me, for example, I mean, it's you can still make those kind of deals but it's still fun just to analyze them.
Joe Troyer
Yeah, for sure. Analyzing the businesses you can learn a lot even if you don't buy I've learned a ton analyzing businesses for sure from looking at like you said, their software, their tools, how their prospecting, anything like that, their packages, their agreements, and then SBA get the terms with SBA are ridiculous. And like the deal that you outlaid with an SBA you would be cash flowing and you'd be cashflow positive because the terms on SBA are so great you know backed by the government interest rates are small payback times are long, you know, you could buy a business at three x gross or three x profit and be cash flowing. No problem.
Michael Tasner
Exactly. Yes. I'm I'm ready to buy some more. So that that's kind of that's I'm on the hunt for I've just literally had a conversation earlier today. But we're strategically looking to add services. I'm looking for agencies that I currently don't have that service. So I'm looking at a couple of PR agencies, I'm looking at a couple of high end social media agencies. I'm looking at a branding agency. So we're looking at how can we, because what I don't want to do is all sudden I bought 10 agencies, and I'm back to having 10 different niches or hundreds of different clients, I want to see, is there something that I can add to my agency so I can sell more to my existing customers? That was way way back when one of my earlier clients, he had an insurance agency for nurses, and he grew all of his companies to over a billion dollars in sales. And I said, What was your number one secret? And he said, two things. Number one, he kept starting companies to sell more to his existing audience. Number two, we kept growing through acquisition. So he had this insurance agency for nurses Then he went bought a company that sells scrubs so that he all sudden started selling the nurses scrubs.
Then he said, Well, why don't we not just offer nursing insurance? Let's offer home auto life? Let's find out what else these nurses need. And so that's kind of the mentality is, are there some things that maybe we're not as good at? Like, we're not a huge social media agency, we're, we're more lead gen. So if a childcare center came to me and said, I want you to give us an amazing social media package and beyond this and engaging all day, every day, I wouldn't have the team to do it. But if I could find a social media agency that maybe isn't overly profitable, that I could kind of turn it around and make some cuts and kind of join services and things like that, or join software tools. That that's very attractive to me.
Joe Troyer
What do you think as an owner and leader of no joke, kind of the second time around what do you think are the biggest impression admits to yourself, right? As a business owner, the second go around, like what do you think is changed from your leadership that you really brought to the table to no joke this time?
Michael Tasner
No, that's a great question. I think the biggest thing is really valuing my people more. So I really at the first agency, I really didn't get a chance to interact with very many people, because I was the strategy guy for all those clients. So we were hiring people that I didn't even like there was some people that I would see when I would go out and grab a cup of coffee on a break that I'm like, I don't even know who you are. Well, this is I don't know, Jane, which I never had a Jane working for me, but this is like this person. They've been here for six months, like, oh, welcome. So like, I think you'll that it's not that I didn't care, but we didn't. We didn't have any kind of culture or core values. So it was jack Daly another earlier mentor of mine wrote a couple of really great books, and he always would Same and do you have a culture by designer by default. So our culture by default was missing deadlines. I mean, under delivering over promising, like just, it was borderline toxic. So this time and this kind of go round, I wanted to make culture a bit more of a focus.
We hire and fire based on core values. So we're interviewing right now for a few more positions, we're looking to add another account manager and the initial they go through screening interviews and things like that. But when we use top grading, which I never used to use, I know that I should have used it way back when and we never did. We had all these tools we didn't use, but then we do five other really short interviews that are all hundred percent culture focused of how can we make sure that their culture fit?
So I tend to hire more for culture fit than skills when the first go round? It was the exact opposite if you I wanted to make sure that you knew social media, okay, great. You're hired. You're a web developer. Okay, great. You're hired, like, because you can design all these websites. But then we found that they weren't. People people were they were like, they wanted to just hibernate and not talk to anyone that didn't want to collaborate. And that really kind of ruined it. The other thing was I previously I hated meetings.
And there's lots of lots of philosophies around death by meetings. And there's all these different books about pros and cons, but we do a daily huddle. It's every day at noon, with the whole team. So kind of like an all hands meeting. Really great book, if you haven't read it called double double by Cameron Herald. It's one of my favorite books. He was the chief operating officer of one 800 got junk and helped grow it from I don't know, 30 to 150 million at the time. And he talked about these kind of daily huddles and the weekly KPIs and all that stuff. So now I'm much more focused on the numbers. That's where all the profit first stuff came in, of, kind of managing the numbers better, having those reoccurring daily habits
But being a lot more focused on culture, I don't really have the hustler mindset anymore. I don't I mean, I think I hustled when I was younger but I'm more of we have one life let's make some money let's impact some lives and let's enjoy it. I mean, I don't I don't have ambitions to have 100 million dollar year agency that that's that's not my ambition. Some people it is but mine is to be able to serve a lot of people and to be profitable and to have fun. I mean, I remember way back in the day when I absolutely hated to go to bed. Like like I gotta go talk to 30 clients say and who's gonna be pissed off and I didn't want that so a lot more culture focused and and fun and even tracking. I mean, I track team member happiness. It's one of my five personal KPIs that I track so they they're getting a survey every month. We implemented the dream manager program, really great book also. You have to notice I love to read business books, but we implemented that that was That's been insane. So just a lot more people focused. Whereas last time I barely even knew who worked with us to be honest with you.
Joe Troyer
Love the people focus. And it's I think it can be hard as a first time entrepreneur to not do what you did exactly. I know that I did in my first business, like I was the talent. I was the I was the dancing bear. Right? Sure. It's like you were and as soon as the bear stopped dancing, everything went to shit. And I think it's it's hard not to, it's hard not to go there, be there and up there your first time I think, as an agency, especially you end up being the expert, the go to person and and it's not company focus. It's not values focused.
Nothing's repeatable. And so the people that are in the business are there to just support you, but usually you feel like, you know, you're on an island doing your own thing. Yeah. With the weight on your shoulders. Yeah, exactly. You mentioned that you're not a hustler. You mentioned you're not a grinder anymore. I'm curious. When do you think that that's Changed there? When do you think that that went away and why?
Michael Tasner
So initially, I thought it might have been because I lost my passion with having an agency. So when I sold the agency, I didn't plan on getting back into the agency game. So I did some consulting, I wrote another book, I took like six months off, which was actually frickin amazing. actually think that the day after I sold the agency went to the Dominican with my wife, which was great. The company that I sold it to wasn't too happy with me but I already had it scheduled can be scheduled to like and then as I'm down there and kind of ruin the vacation consider calling me and like you gotta check it on this and this $20,000 month clients canceling and like, here we go.
I think I just, I've got four kids. So I think that's been been a lot of it. But I think it's for me, it's just it's been I've realized that there to me. There's two different kinds of businesses. There's a lifestyle business and then mean there's I guess the you have ambitions to grow a big business. So I just made the decision when I was younger, I'm like, I want this huge business. And I just want to keep growing, growing, growing, growing. And there are a lot of people that I know that that's kind of the mentality. And that's, that's their strategy. One of the companies I used to work with is advantage media.
And they own they grew through acquisition as well. And they've acquired Gk IC, so they own all of the Dan Kennedy stuff. They partnered with Forbes books. So they threw that into a massive brand rate, right when I was leaving, so I helped them do that, which was, I guess, a fun project or fun resume builder, but they've been growing through acquisition and his ambition is to continue to grow into this huge conglomerate, and I'm sure they've talked about their revenue lately. I don't know what it is, but it's probably 10 x from when I was there working with them. So there's that mentality and That it's not a wrong mentality by any means.
It's just for me, I think I would rather have more of a nine to five in the sense of, I can go in yesterday, the day before, even though it's cold in Buffalo, I was swimming in the pool at 530, for example, and being able to do that, rather than having to be constantly checking my phone, and I think it was more just I got turned off from kind of what I did to myself the first go around, and I've been very cautious on doing that again. But I've also realized, and I'm not saying that this phrase is accurate, but I'll use the phrase, there's a lot of people that say, I mean, go big, go broke, and stay small and whatever the and then stay profitable. So, I mean, there's certain numbers that I can start to run and if I want to continue to grow, I surely can. But it just is more in alignment with what your exit strategy is.
And do you want to be doing this for 20 years do you want to get to a certain number and be able to bank a lot of cash, so Really is based on your personality. But I mean, I love Gary Vaynerchuk. But I, I would never want that lifestyle. I wouldn't want to be working seven days a week. I mean, he's taking conference calls at 11pm. And, but he's got his vision of buying the New York Jets. And he talks about that every day all day. And I mean, he's grinding and I'm sure he's making a lot more money than I am. But to me that the trade off of not being able to see my family as much as I would like, being just constantly on just wasn't for me.
Joe Troyer
I feel the exact same way. I went through a period of time where I was that grinder I was a hustler. That was the mentality I believed in is I'm just going to work harder than everybody and I'm going to work more than everybody else, or you're not going to be able to touch me, you're not gonna be able to beat me. I'm going to be 10 miles ahead of you. for all intensive purposes. We could argue with most people that I did. I had that money, I enjoyed it, but I like you found that that didn't really make me happy once I had it and I grew tired of it. I kind of moved on. And then it was more about balance. And it's funny that you said nine to five, right? Like most people, like don't want to work a nine to five, I work a nine to five, right? Like, maybe a nine to four, maybe a show and the five some days, but I mean, I have anchors, hours, basically. And I do whatever I want. And that's where I'm happiest, you know,
Michael Tasner
No exactly. I mean, one of my my earlier mentors, one of my I skipped over to the introduction, but I had the privilege of being the the Chief Marketing Officer for guerilla marketing International. So I was there their cmo for a couple of years and was mentored by Jay Levinson, who passed away a few years ago. And one of the things that rubbed off on me from his mentorship was, he usually would work a three or four day workweek, and he would, but he would be insanely focused. And he knew that I know this book, the one thing so that kind of mentality of what are the one or two things that are really going to drive for him at the time it was when you could get $50,000 home hundred thousand dollar $200,000 book advances. So for him his most best use of his time was his brain of sitting at the his Mac and just typing.
But he wouldn't start his day until like 11 o'clock. Like I knew I could never book a conference call with him before 11 but then he'd work till maybe on and off until like five or six, usually like Tuesday, Wednesday, Thursday, and he would just be intensely focused and but then him and his wife Jeannie, I mean they were traveling all the time they had an RV driving all over the plate like for me, it sounds like for you as well. I mean that that, to me sounds much more enjoyable. And as long as you're managing the numbers and you're investing and doing other things, you don't necessarily need to be working 24 seven by any means if you do it the right way.
Joe Troyer
Earlier you brought Mike Michalowicz and we had Mike on the podcast I'm curious on how you ran into Mike and how you ended up actually being a certified profit.
Michael Tasner
So I read the book profit first. And I initially implemented it into my agency into no joke marketing, because again, the first agency that I had it was 100%, bank account accounting, which I would say probably most of the people that are listening are doing, you log in, you see, you have enough money, okay, great. You're managing it based on what's in the bank. So I just happened to stumble upon the book. I'm an avid reader, not a series on that as much lately, but way back in the day, I'd probably go through two or three books a week.
Now, I try and do maybe a book a month and really actually put it into practice, which is more important. But I implemented profit first. And then I decided that when I was like you, I get to talk to a lot of agency owners and masterminds and things like that. And a lot of these agency owners are all over the place. When it comes to managing their numbers. They have the wrong business. This entity so they're setting I mean, I find myself giving unsolicited advice to like all my contractors, so like, we're getting some remodeling done in our house and I don't know how it came up. I'm like, are you a sole proprietor?
Are you an lol? Like, it's like, yeah, I'm like, Well, if you get hurt, or your guy gets your employee gets hurt, you're gonna be in trouble. Oh, great. Thanks. So I find myself kind of giving unsolicited feedback to my colleagues or friends of Hey, I mean, how much should I be making on this job? And how much is a good amount of profit? How much salary should I be taking? So rather than just implementing it in my business, I decided to become a certified profit first consultant.
And it's in no way is it my my full time gig, it's been more of kind of helping some agency owners out here and there and taking them through the process, whether that's implementing it for them or kind of giving them some baseline numbers, which usually is the most helpful to say that here's where you're at and here is based on what I'm seeing where you should be. So start working towards that competency. saw the impact that it made on my business. And I started to kind of look at bringing that to some other agency owners essentially
Joe Troyer
That's awesome. Yeah so so much needed not even funny i think that that's I could be your full time business and seven figure business all by itself such a need and then I can't tell you how many quote unquote successful agencies I see that aren't really successful. I mean, they're taking home next to nothing. Can you maybe talk about kind of fundamentally what profit first is
Michael Tasner
so that there's a couple of different ways to look at it and the best analogy and this isn't one that Mike mccalla Wits uses or I think any the other consultants but my I use it because this is how my parents used to do their budgeting so they would do the envelope system. So example. I always like to use simple math. So if you were bringing home net $1,000 a week, and you would take that thousand dollars and you're going to have different envelopes, grocery money, your I don't know cell phone bill, utilities and the gas and then maybe a little bit of a slush fund. Usually people back in the day weren't putting money aside for investing, it was more to just kind of pay the bills.
So with profit first, obviously the mentality is really more about pay yourself first. So your agency and your business regardless of what business you're in, it's designed to serve you. It is not designed. I mean, yes, you have clients. Yes, you have employees. I was just on a call earlier today. And I love the analogy of because a lot of people are asking about me, what do we do in terms of profit first with COVID. And I can give you some ideas there in a second. But the analogy that the person used was you've got to put your if you're sitting on an airplane, and they're talking about that whole spiel of should you put your mask on first.
If your business goes under, how are you going to pay your employees? How are you going to pay your mortgage so your business They're to serve you. So the first kind of mindset change is when you're doing the numbers when we can talk about the recommended percentages that I tell agency owners in just a second also. But what you're doing is let's say your business is doing 120 grand a year. Again, I like to use simple numbers. So $10,000 a month, what you do with profit first is that all of that $10,000 goes into one account called income. And then twice a month. Historically, I recommend the 10th and the 25th.
You're going to make some transfers. So that $10,000 is going to get transferred into a few different accounts. So the first account that I always transfer to is profit. And that's the whole piece of paying yourself. First. You've got to make sure that your business and that's not your salary, that is profit. And we'll talk about how you I get I'll talk through the strategy with you because I know It's a try and talk at a high level and then get a little bit deeper. So profit account is one. The next account would be your owners salary. So how much money are you paying yourself out of that $10,000 a month that's currently coming in.
And a lot of owners will say, well, I've got I've got employees, I've got to pay for, I don't know, app, Sumo and this and that, and all these all these frickin tools. So I'm only gonna pay myself what's left, this is the opposite. You're going to move some money to profit and you're going to pay yourself a reasonable salary and enough to pay your bills. Because if you can, and I know there's obviously as you're getting started, you might need to hustle a little bit more or be a little bit more scrappy, and pay yourself a little bit less. But you shouldn't be adjusting your salary down. As your business continues to grow. What you'll adjust is your salary will continue to kind of grow but your profit will also continue to grow as you build this business. So profit owners pay,
and then you're going to move some money over to op x. So op x is usually sadly where most agency owners put all of their money. So op x is paying your team members salaries, contractors, paying your bills, all those kinds of things that come up each and every month rent, etc. And then finally, the tax account. I give a little bit of different advice on the tax account. There's so many different schools of thought. A lot of people will say, you want to be contributing 15% gross.
So if that business did the $10,000 that you'd want to move 1500 what I tend to do and this is a little bit tricky for people that are newer with profit first is I like to try and analyze kind of my tax status, and I will move tax money based on actual profit. So what I'm by that is if you're paying yourself a salary, if you're op x, you need $11,000. And you don't have it. it to me there, there wouldn't be a need for that particular month to move the 1500 dollars. So a lot of people will say, well, it's great that you have all this extra tax money at the end of the year. I don't like giving out free loans even though the money is still in your account.
I try and be more accurate with the tax number, but I always make sure that it's a little bit overfunded. Because I will tell you that most agency owners and what I did, before I started doing profit first, I didn't move any money to a tax account ever. And what I would do is, I'd wait to the end of the year, and my CPA would tell me what the number is, and then hopefully I would have a client that I could get to pay for the year and I would use that to pay my taxes. So you want to make sure you're putting money aside for taxes. I pay once a year you can pay quarterly that there there's pros and cons to all the strategies but what you're doing is then you're going to start to establish percentages.
And this is where the system becomes really, really powerful is that you want to look at what are your numbers today? So if you're doing that $10,000 a month, I want you to write down your percentages. Are you taking out $2,000 a month? Great. So then your your owners pay would be 20%. Are you taking any profit? If no, we're going to come right back to that. But usually it's the owners taking out a draw, and then they're putting everything to op x. Most agencies that I've seen, they're not putting aside for taxes. And they're sure as heck not putting aside for profit. So when you have those baseline numbers, what I want you to do then is try and work towards some more optimal numbers.
So example, if your agency is doing half a million dollars a year to a million, there are some guideline percentages. So what the math could potentially look like is you're taking 20% salary your taxes 10 to 15%, your op x would be 50. And then your profit would be 15. And what you're doing then is every single month you're moving based on the percentages. So you're not adjusting based on the revenue, the revenue is is in accordance with the percentages. So you say, Well, my op x needs to be this. You have to continue to stick with those numbers. And it takes time. And what I tend to tell people is if they were putting nothing aside for taxes and nothing for profit, start with 1%. Start putting aside 1% of your profits every month.
Taxes you can't get away with only putting aside 1%. So if you cannot afford to put money aside for taxes, you're going to have to look at cutting something in your op x, you're going to have to do some more to work yourself again to go get some new clients. Your system in your operation is broken. Now the other and the final piece to this is the profit account and the tax account and you want to do this, I advise credit unions, I'm a big fan of credit unions, because you're going to actually have separate bank accounts for all of these, you're going to go to a credit union or a bank, you're going to say I need an income account, I need a profit account, and owners pay account attacks account and an op x. So you're going in and setting up five or six bank accounts, the profit and the tax money that should then get automatically funneled outside of that particular bank or credit union.
And the reason behind that, is that when you see it, you're still going to go back to your old ways and you're gonna say, well, gee, there's some profit money and I need to pay the MX bill. So I'm going to transfer that profit back in well then you just completely destroyed the whole system. So you've got to transfer it to a different bank, so that you don't see it. Same thing with the taxes it goes it leaves instantly so I use first and first internet bank first IV calm so when it hits gets my account twice a month, it literally goes in and it sweeps all the money out of those two accounts. And the profit
That's for you that that is an owner benefit. That is a, it is never meant to be put back in the business. That's not to go buy yourself a laptop, it's not to go, it is take a vacation, remodel your house, whatever you'd like to do with it. It's meant to be like a slush fund. So that's kind of the basics. I mean, there's more advanced ways where you can start to have separate accounts, the objects, I separate out for salaries, sometimes we'll do another bank account for rent and we'll move percentages there.
But initially, those are the five accounts that I always recommend setting up. And you can again, you can adjust the percentages. But the goal is that you should not be adjusting down for profit or owner's pay. So you shouldn't be You shouldn't have to keep changing those but when if you're smaller agency and if you're doing zero to a quarter of a million dollars, I mean you should be taking 50% so it shouldn't be 50% op x, it should be about 50% owners pay. And that's just kind of in that number, that percentage goes down as you get bigger. But then your profit number goes up.
Joe Troyer
That's a lot of info. I mean, you were on a roll, so I don't want you to stop and it was really good. So Mike's podcast was great. He went through like all of his books, and he so he didn't get a lot of time to talk about profit first. I've been doing profit first for 20 or 21 months and it's made a huge, huge difference for me, for my business for my personal life as well. Just being able to know where I'm at because even though I had accountants before, even though I had tax advisers before before profit first, you know, everything is the slush fund right? You just opened it up I got 100 grand in there. This is fantastic, right? Like we're good. Open it up all there's 150 grand in the checking account or good, right like and that's how I operated the business. But I got caught like you did you know what Luckily, I had money and it was fine. But I did get in situations that weren't fun situations for me. Luckily, you know, I was good at saving money, but, you know, Hey, Joe, you know, you know, Knock knock, you still owe the government 100 grand in taxes. Sorry, we're a little off of what? You know, I gotta go right.
And you know when when's it due? Oh, it's due tomorrow. Can you get it out today? Like serious like, and I ended up in a couple of situations like that. And I was like that this has got to stop. And so profit first has been really good for me. I'm curious, some of the advice that I got, I won't say if it's good or bad because I want to hear your opinion with executing profit first from a profit first professional was to start or less concerned or to start more conservative than aggressive, you know, move from there. Let's get get more aggressive over time. I'm curious kind of what your thought process is.
Michael Tasner
I'm the same way I mean, it's similar to kind of diets and exercise. So I mean, I you steak and meat, like, way too often. So when I was looking into kind of eating all vegetables and kind of plant based dieting, I'm like, Oh, this looks great. But I knew that if I jumped into it and just did that, there's no way that I would, it wouldn't happen. So that's why I say I'd rather see you start with 1% of profit, you know, at $10,000 a month, that's a small chunk of change. I mean, I'd love to see 10% in there as profit, but it's more, it's more habitual. It's in it, it'll take six months for you to start getting used to the system, to making the transfers. But it really is, if you operate based off of those percentages.
That's really the secret sauce in this is that you're operating off of the percentages. But I always look at getting a baseline. So like, what's the baseline if you're doing mean if you're already paying yourself 50% then you're great. So we're at a nice baseline, but I might say we'll start paying yourself 40% taking Send for profit. And there's obviously depending on your type of business entity, if you should be paying yourself a salary, you're just taking in distributions. There's a lot of other tax things there.
But I never recommend kind of just going full guns blazing. And but I will also tell you that there's never been a time that I haven't looked at an agency that said, You've got to scale back on some of the drawbacks. Yeah, because a few that usually, I mean, I've never said that you can get rich by cutting expenses. But if you want to start to make some of the math work initially, you might have a couple of fringe benefits or you're running the country club through your, your business or whatever, the sporting tickets or something like that, that I mean, it still could, I guess be deemed personal, but it's more of where there's some things that can scale back on so we can lower your op x but it ends up coming back to you anyways, because then we're able to reposition that money to bumping up your salary. I mean, I hate going and seeing an agency doing a quarter of a million dollars or half a million dollars. And the owner tells me they're paying themselves 25 $30,000 I mean it, like, how are you living like it? It just isn't isn't realistic.
Joe Troyer
Yeah, I know, for me, I think I put my op x allocations really low, because I wanted to focus on profit. And it was hard. I put my owner's comp up. I put my obex down, I put in decent allocations, I think, for profit, and for taxes. And, man, the first couple of months, it was like, I was getting choked out, right, like, you know, but it was it was a harsh reality that I needed to see. And for me, I was open for it because I knew that there were corrections that I needed to make. And it was making me make those corrections and feeling the pain of it, versus just letting an accountant say, here's the books, you know, hope you like them. You got any questions, right? Like there's no way for me to act upon that information or hold myself accountable. I knew that if I didn't make Actions happen swiftly and quickly that the money in objects wasn't going to go for example, and cover the entire month. And so that actually made me kind of held me accountable.
Michael Tasner
Absolutely love it. No, that's great. Yeah, I mean, it really, when you're working on lowering your apex, I mean, it really makes you question the things that you're buying into, I really need this and is it going to help grow the business and, and all that good stuff? So no, that's great. The more more owner salary, the more profit the happier I am for sure.
Joe Troyer
So I want to wrap it up. We are at the top of the hour. It's been a blast. I first and foremost, just want to say thank you for coming on and sharing with everybody your story and your takeaways and your tips. I want to ask you, obviously, you've mentioned a couple of books already. But I want to ask you for one book recommendation. So instead of asking you for three books, or we're about to be at, I want to do something a little different. I want to ask you, what's the one book that's made the biggest difference on the way that you do business and why?
Michael Tasner
So I am a huge proponent of that book that I mentioned you have double double by Cameron Herald. And the reason is that it just gave so many one off tips that everything just resonated about having a he calls it now vivid vision but I in the book, he called it a painted picture. So like where's your agency going to go? Daily huddles? Kate managing based on KPIs how to get free PR. I mean, there was just so many nuggets in that book, more from I guess, an operational standpoint and I'm not strong in operations that really opened my eyes as to what was possible and I started to see those things really impact the business. So I've read lots and lots of books. That one is definitely in my top five for sure.
Joe Troyer
Awesome man so we'll make sure that we link that up. We'll make sure that we link up as well. Mike, no joke marketing and then where are you most active, Facebook, Instagram, any social media at all.
Michael Tasner
Yeah, I mean, it's Facebook I'm starting to get a little bit more into from a business standpoint. I used to keep it personal. I'm on Instagram all the time posting business quotes and things like that, but ever all my channels are slash Michael Tasman or so I'm pretty, pretty easy to find and track down.
Joe Troyer
Alright. So thank you so much, Mike. It's been a pleasure, man. Thanks for comingon and sharing with everybody.
Michael Tasner
Sounds good pleasures all mine. Have a good afternoon. See ya.
Joe Troyer
See ya everybody
Transcribed by https://otter.ai
