Brad Weimert 0:00
If somebody comes in at 10, we'll set up a merchant account for them. And we do what are called payment optimization calls. And so we'll check in with them a month out 90 days out six months out, see where they're at, and put them on a trajectory. So once they hit the 50 grand a month, we say, Okay, let's look at do we want to set up another merchant account? Are you in an industry which warrants that? And how do we make sure that we have a course for the future, they're
Podcast Intro 0:26
welcome to show me the nuggets. We're each week, Joe chats with world class entrepreneurs to find out the key principles, strategies and processes that lie behind their outstanding achievements. Now, your host, the no bullshit serial entrepreneur, Joe Troyer.
Joe Troyer 0:45
So, these days, you guys are helping seven figure eight figure businesses with their merchant accounts for when people can't work with you. They're not that big yet. Maybe they're doing a couple 100 grand a year, is there somewhere that you refer them? Or At what point you say, you really need to get off the Stripes, the Paypals? Right, and you need to change the way that you're operated?
Brad Weimert 1:08
Yeah, that's a good, that's a really good question. So we we basically have our general philosophy is that once you are past, maybe 30 grand a month, you should look at having a real merchant account. And also look at is there a use case for me having more than one merchant account, which would function for this distribution, right, not having a single point of failure. The also from a fee perspective, you can get a better deal at about, you know, 20/30 grand a month, you can get a much better rate than paying what you're paying with Stripe or PayPal. So that's about the mark, we're happy to help those people. It's just not where we target, right? So our target market is higher, because it's an easier value proposition to express. But when people are, you know, at 20 grand a month, or 30 grand a month, it's easy for us, we set them up, the risk proposition is pretty low, you're still kind of flying under the radar. And yeah, it's easy stuff. If you're under 10 grand a month, like just use stripe or PayPal. And yeah, you know, you're probably not gonna have an issue, you might, but you're probably going to be fine. And it's the easiest thing to spin up. Once you solidify your business and you know that you have the ability to start to scale start to ramp. That's, that's when you have to look at that stuff.
Joe Troyer 2:33
saYeah, I've generally told people kind of 10k a month, once you get there, you need to you need to be working on backups and underwriting and a more serious merchant situation. So sounds like you agree for the most part.
Brad Weimert 2:47
Yeah, basically, if somebody comes in at their at 10, we'll set up a merchant account for them. And we do what are called payment optimization calls. And so we'll check in with them a month out 90 days out six months out, see where they're at, and put them on a trajectory. So once they hit the 50 grand a month, we say, Okay, let's look at do we want to set up another merchant account? Are you in an industry which warrants that? And how do we make sure that we have a course for the future there? But yeah, those numbers are ballpark.
Joe Troyer 3:15
Perfect. So one thing that we didn't want to talk about, and I want to make sure that we do I think we'd be remiss if we didn't, is kind of what I guess it's called holdbacks. As merchants are charging, they're holding back some funds to mitigate their risk. Can you talk a little bit about how that works? I think we kind of have to when we talk about merchant accounts.
Brad Weimert 3:33
Yeah. So we call those reserves and everything goes back to either fraud or chargebacks, which can be the same thing. But we look at everything in terms of how do we protect risk against chargebacks. Because if the business is gone, we have to pay them. Or if the business is open, but the chargebacks get too hot, we get fined. Right? it all revolves around the same idea. So one mechanism for credit card processing companies to control that risk is to put money into a reserve and the most common terms for a reserve or a 10% six month rolling reserve. And what that means if you sell $100,000 a month, we're going to keep 10% and more accurately our banking partner is going to keep 10% and give you 90. So let's say January, you do 100 grand. We deposit 90 grand to you 10% stays with the bank. February 100 Grand 90 goes to you 10% ito the bank. March, April, May, June, same thing, July. This is where a six month rolling reserve comes in July. We give back the 10 grand from January, but we keep 10 grand in July. Yep. In that example, it's 100 grand every month but that rolling is is important because if one month you did 400 grand, well, then it's going to be 40 grand, not 10. Right. And so we wanted to credit card processing companies wanted to mirror your actual behavior. The thing to know about that, and the terms could be different, right? It could be a 5% reserve, it could be a 15%. Reserve.
But the thing to know about that is that that money just sits there, it's usually not interest bearing, so it's just sitting there with the processor. And the intention of it is that is not to pay the chargebacks that come in from you, it's to protect against your business going under, and paying chargebacks if your business is no longer there. So if you're ever in a situation where a provider has held a bunch of money from you, they're holding on to a reserve, the best thing you can do is control whatever caused them to do that, right? If you had chargebacks, or whatever, you might just be with a shitty provider.
But their risk is gone, after the account has been closed for six months. So the surefire way to get the money back 99% of the time, is to eliminate that merchant account. And six months later, they don't have any risk, and they'll release it. Now, that also obviously can be tremendously disruptive to your business like I my my suggestion really is not to do that. It's really to keep processing correct to the problem that you have. And then in three months, reach out to them and say, Hey, can we reassess this? Can you release some of it now? Because you see that our chargebacks have gotten under control? That's the best approach.
Joe Troyer 6:35
Are those typically is like the that tracking and accountability shown? And like a statement?
Brad Weimert 6:42
With good providers
Joe Troyer 6:43
How would somebody know, I would somebody know where that how much that money was and how it was being dispursed?
Brad Weimert 6:50
Yeah. Most providers don't show you. And they just keep it on their books, and make it very difficult. So you request a reserve balance. And hopefully, they'll send you something. It's very rarely in a functional format. It's usually like a number in an email. Every once in a while they'll like actually have a spreadsheet or something they can send you. And then there are the few that will track it in a portal for you. So like the same place, you'd log into to pull a state monthly statement or look at your numbers. They'll have the chargeback numbers there. But one of the reasons that or I'm sorry, the reserve numbers there. Yeah, it becomes a tech consideration on the backend for credit card processor. Are they set up to show you that stuff or not? and most are not?
Joe Troyer 7:41
Gotcha Yeah, I had a friend that sold his business. He sold all the IP sold all the customers, but they didn't keep the merchant account. Obviously, they shut it down. And I mean, never got the reserve back. His attorney hit him up and was like, Hey, did you get the reserve payment from the merchant account? He's like, I don't even know what you're talking about and he educated him. And he's like, Oh, okay. So he started going after and following up and actually pursuing it, and ended up getting like 140 or $150,000 check that he didn't know he was getting, that was all literally found money. Because he had already exited the company, the sale was done. He was out. And it was just all pure cash profit, no cost of goods. So that's why I asked I don't think most people think about that track that it's it's kind of out of sight, out of mind. In my experience.
Brad Weimert 8:35
Yeah, well, I can tell you that the example you just use is the most fun one. And it's it really pertains mostly to acquisition. So like, if you're looking to buy a business, that is something you want to check on. Anytime you're buying a business that has commerce coming through credit cards coming through a merchant account, find out if there's a reserve and look into the details around it.
Joe Troyer 8:56
I mean, that's huge. If you acquire that account, and there's and there's a reserve sitting in that account. I mean, that's a whole nother way to value the business or devalue the business is the merchant, the standing and then whatever's in the reserves.
Brad Weimert 9:12
Yeah. In the other. If you're when you get into acquisitions, and assessing businesses, the others the chargeback rate and the refund rate and knowing Hey, is this a normal thing or not? So we have a client who is who is rolling up other supplement brands and they keep buying supplement brands. They're actually massive in retail. It's one of the you know, nine figure plus companies that are on our books, but now they're pushing really hard and into ecom they keep buying these companies. They send us their statements to assess before they do the acquisition because we can look at it and calculate it really easily and say you know, are you in the know, medium or Ah, risk category?
Joe Troyer 9:14
I like those levels. Very self explanatory.I love it. No that's a great takeaway. And I wouldn't I mean, I would have thought about doing that in due diligence, the chargeback rate or refund rate but never for the life of me would have considered looking at the hold backs. And that rolling reserve that's, that's a that's a nugget for sure.
Joe Troyer 10:16
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Joe Troyer 12:07
So I want to I want to transition this for a second, Brad, and talk about a different part of your life, the adventure, the exploits, the mental toughness, the craziness side of Brad. I think you do some really outside the box things. And I'd love to hear your perspective and why and some of those crazy things. If you if you would, it seems like whenever I look at you on social media, you're off doing something nuts.
Brad Weimert 12:38
Yeah. Yeah, well, certainly talk about that. I, you know, I'll I'll set the stage by saying that. You know, when I, when I mean, when I meet people in general, and they're like, what do you do? That question, it still bothers me a little bit. It used to bother me so much, because I'm like, you don't really fucking want to know what I do. What are you talking about? Like? Just this annoying? Let's skip this part. Right. But the the parallel? And so I usually I used to answer with like my do all sorts of stuff. Like, you know, I do a lot of bike riding and a lot of rock climbing. And clearly, that's not what they're asking. But there's this tremendous parallel between entrepreneurship and specifically finance and risk assessment over here. And the risk assessment that's related to adventures. And there's a question of, hey, how far can you push it? And how do you calculate the appropriate risk and control it?
Joe Troyer 13:40
Life insurance companies must love you, man.
Brad Weimert 13:45
Well, whenever I get on the phone with an underwriter of any kind, I have to set the stage and I'm like, I'm looking out for your best interest to buddy.
Joe Troyer 13:52
Yeah, before we go any further, let me just tell you. This is my Yeah. So I know that you, you climb. I know that you ride bike like cross country, some crazy things like that. Is that just is it the thrill of the chase? Are you just an adventurist help me understand where that all comes from? Or stems from?
Brad Weimert 14:19
You know, I used to think so. I think there are a couple of valuable frameworks in life for helping to understand people and one of Tony Robbins frameworks is your core needs, your core values that you're chasing what you're going after. And I think I am seeking variety on a routine basis. I think that is true. And so these things give me variety. I don't have a whole bunch of stability, right? I mean, I am what and I think part of why I like endurance why I like exercise and endurance is because there is a sense of stability associated to it. And I think that's contradictory for a lot of people are in their thinking, but I know that if I go do this thing, I'm going to get this outcome, I know that if I go lift weights for an hour, it's gonna feel like this, and I'm gonna get to this place, I know that if I go run for an hour, I'm gonna feel this way and get to this place. And so it accomplishes
I think the training element accomplishes some of that stability and regularity for me. But the rest of it, you know, the, the, like, how far can I push past my baseline thing? You know, what is what is going out and running for 12 hours feel like or 15 or 20. Those things when i when i when i like, when I do a deep dive and look at what actually is important there and what's actually relevant. It's about relationships. So, you know, I like to go on these adventures, not because I'm seeking adrenaline, but because in the moment, I am building a relationship with myself, and or with the people that I'm with, in a very unique way that happens with certainty is going to happen, or you're going to repel people. Yeah. And also, you're creating a story in the future, that helps build relationships, right, you get to talk about it again, and say, Hey, this is my experience. And so I think that at the core, that's a big part of it outside of a litany of other lessons that you get, but it's a it's a mechanism to build relationships for me.
Joe Troyer 16:41
That's awesome. I love the the variety aspect. I can, I can say that I've definitely need the variety as well. That's something that I go after. Definitely fitness for me is a lot about stability, though, too. And that that routine, that ritual, I think definitely relationship with myself. You know, I know that when I workout every morning, that's going to be the hardest part of my day, and everything else is going to be easy after that. And I have no problem waking up and just go in and kick my ass like, because I know everything else is gonna be simple. And I don't know, for me. I know I have what it takes every single day. And so then I don't question it throughout the rest of the day, if that makes sense. Like, it's, it's not like, Can I hit this goal? It's like, of course, I'm gonna hit this goal, because I smashed my fitness goal every morning. Just something it does something for me. You just my mindset?
Brad Weimert 17:34
Yeah, what and I think that the I think what people, what people don't get is it doesn't matter what level you're doing it at it all. Like, you know, for me it What matters is how far past your baseline you're going, and how often you do it. Right? The consistency that you create through doing it, the more reference points that you have, ultimately, that tells you you're capable of doing something. So I think that that's like particularly valuable and doing that. And then the other is, if you're new, if you're brand new at something, you don't have any reference points. So like, if you've never run before, a mile is a long way to run
Brad Weimert 18:21
once you like, Hey, I'm running a mile all the time, you know, you can run a mile, but two miles becomes scary. It's double what you've ever done. And it truly doesn't matter. You know what level you're at? It's, it's the, you know, the percentage over your baseline. It's completely the related distance. So like, you know, you going from one to two miles might be the same as me going from 30 to 60. Yeah, right. And I think that that's, I think it's really important to know, because most people that look at the crazy person doing ridiculous things don't relate. And I think they should, I think you should get the same lessons and recognize that it's not far away. And it's all those little baby steps that add up and you get the lessons through that just the same.
Joe Troyer 19:14
Yeah, I love that. That's so important. It's it's all that consistency, and how are you against your baseline? Right, like, and so it's gonna get crazier and crazier and crazier over time. You know, I went from a couch to 5k up to running a 10k every day, right, like, and, you know, and then it was on to a different challenge. So I find Personally, I get bored really easily and so I have to mix up the challenges. Are you like that? Or do you stick with stuff longer?
Brad Weimert 19:42
Some of both. I think that I if I'm feeling complacent, I'll go back to just making one of the routine things harder. And but um, I think it's the there's a there's some deep seated issues. Probably that leads me to this. But I tend to go back to the same things I've done. But it's an excuse, you know, it doesn't make it easy. It just makes it a little easier than starting from scratch. So, you know, for example, I going into COVID going into the lockdown. I was running like, going out and doing like 20, 25 plus mile runs on Saturdays.
And I was getting ready to do a couple 50 mile runs. And then COVID hit and I got sick. And I was like, You know what? runnings fucking terrible anyway, I quit. I'm done running. And I literally for I don't know, a year didn't run it all. You can't just go back out and do it again. That was an example of what I wanted to do something I thought, Okay. Let's start with that. Let's get the baseline back up again. And just like any other reference point, I have now gone from the couch, back to a number a number of times have gone into training mode for significant stuff. So now I know what that feels like. There's some comfort in that. Yeah, but don't get confused. I'm all for the crazy shit that's new and different.
Joe Troyer 21:17
So rapid fire man, rapid fire. What's some of the craziest shit adventurer thrill seeking stuff, crazy runs, give me the top four or five things. top four or five?
Brad Weimert 21:29
I rode a bicycle from Los Angeles to Boston. That was those long, long bike rides. I went out to climb the three tallest mountains in the Swiss Alps, I never climbed before. That's mountaineering. We got weathered out of the last one, which was the Eiger, which I'm grateful for, because it's a scary mountain. And a couple years ago, I, I I ran twice the height of Mount Everest, in 48 hours, 36 hours really. And that was a lot. And that's that's an interesting when you go to everything x.com. And there's a fun little video there. But a friend, a friend of mine rented a mountain and challenged people to climb it 17 times in a row, which is the height equivalent of Mount Everest. And in a drunken haze. seven weeks before the event. He was telling me how long he was getting people to do it. And he's like, yeah, we're getting people 36 hours. And I was like, you're getting 36 hours? And he said, Yeah, do you think that's not long enough? And I said, motherfucker, I could do that shit twice in 36 hours. And he said, Oh, yeah, I was like, well, I've had a few Manhattan's maybe I'll tell you tomorrow. So I trained for that and executed that but it was it was a hell of a journey. But I think that I think that those rank on the on the top of the list in terms of endurance craziness.
Joe Troyer 23:09
Heck, yeah, man, that's awesome. Um,so when it comes to your daily habits, your routine the stability? What do you think are some of the best practices or things that you would tell people to check out? Or to try? Or to do what what what's been effective for you?
Brad Weimert 23:26
Um, man, I would, I would hesitate to ever tell anybody what the best practices. But I can tell you the things that have worked well, for me, are a consistency. So being in a routine, period, because it any kind of routine, any kind of habit, any routine builds habit, any habit that you have a frees up space for you to mentally be working on other problems. And so if you can just put things into cruise control, put them into a program just like a company, you don't want to think about solving problems all day that are the same problems, you don't put a system in place to do it. your morning routine, your evening routine, what you do in your life should operate the same way. So for me, I wake up, I read. most mornings I write pretty much every morning. And what I write about varies, but at a minimum, I'm writing down some documentation from the previous days. And so to me, I write down things that were that stuck out that were valuable to me It might be a really painful moment might be a ecstatic moment. But I document all those things. And I hit the gym. And those are like my my given things that I'm doing every morning, and I do them in the morning because I then ensure that they're taken care of out of the way, right? Yep, I know that it's gonna happen.
Joe Troyer 24:54
That's awesome. The Morning Morning habits that ritual reflection time Writing reading in the gym?
Brad Weimert 25:03
Yeah, yeah, huge deal. And anybody that's digging into that it's worth looking at how to book the Miracle Morning, he's a good and tremendous, tremendous following behind that, but I don't I don't follow that. But I think that the, the premise is the same, which is, the routine is so powerful, because it makes sure that you get that stuff in your life.
Joe Troyer 25:26
I think the routine and the discipline to do it every day, right building, building that habit, and getting it it. For me, I started with one thing that really helped was 75 Hard, right. And so doing a list of things, it's not even about that it's a physical challenge, just discipline to do all the stuff on the list every single day. And and that was that was amazing. That helped me build some really great habits. And I still follow like all the things today, probably two years later. So that was really helpful.
Brad Weimert 25:58
Well the other thing, I want to close that loop, which is that for for anybody that's like that, the moment of hey I don't have time to do that today. Just do something. Right. If you don't have time to do the full thing, do something. Because as soon as you break the pattern, it makes getting it started hard again, just keep the habit going. You got to just do something to keep it moving.
Joe Troyer 26:23
Yeah, that's a great tip. If you if you're going to work out for an hour every day, and you did it for 30 days, and you can't make an hour, do it for half an hour. Do it for 15 minutes, do something, don't break that chain, because it's really hard the next day when you wake up to make the commitment to do it that day right? Well, yesterday. Yeah, I completely agree. So man, I want to wrap it up. This has been awesome. I really appreciate you coming on added so much value about merchant processing, and also your adventures and the crazy things that are a part of your life. In wrapping this up, I want to ask one last question, which relates to books. I'm an avid reader. I feel like at the end of every podcast, everybody asks, What's the one book? Or what's the three books? But like looking at your life right now, Brad, what do you think has made the biggest impact in terms of a book and the way that you operate the way you perceive things? When you look at your business? What book do you see in those sections of your life?
Brad Weimert 27:21
Well, I think the words you just use are probably are super important, which is in different sections of my life. Right. And I you know, I went from kind of the, you know, the entrepreneurs canon of books, which are like, Think and Grow Rich, Seven Habits of Highly Effective People. How to Win Friends and Influence People? And it's gone through different phases, Rich Dad, Poor Dad stuff. But I think today, at least in the last couple years, the most impactful book has been Principles by Ray Dalio. And I think one of the reasons for me that it's been so powerful is
Brad Weimert 28:03
He didn't write a book, he has been building a list of principles that he wanted to operate his life from both his personal life and his business life. He's been honing that set of principles for his entire life for 50 years. And so there's a lot of wisdom in that. And for context, he has one of if not be most successful hedge fund company in the world. And a brilliant and very deliberate discipline person, but you can pick it up and get killed 10 actionable nuggets in three pages, and it's just dense with stuff that you can do.
Joe Troyer 28:45
Yeah, it's a great book, great resource, definitely highly recommend principles by Ray Dalio. We will make sure Brad and link up all your social and also easy pay direct in the show notes. Man, I really appreciate you being here. Thanks for adding so much value. And I can't wait to see you soon in LA.
Brad Weimert 29:00
Likewise, man looking forward to it.
Joe Troyer 29:04
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