 Hey there business talk with Tom and Brett and our little coffee. And I think Tom's probably got his tea or something A lot of times out in the forums There's there's people talking about what they make and how much how much they're bringing in on an annual revenue basis and Tom and I were talking about this this morning and you know, how much money are you making or how much money? Are you shuffling and that's the big thing when you think about that, right Tom? Yeah, there's there's this overselling of it You got to be seven figures eight figures whatever that number is But honestly you've watched companies and if you pay attention to the news You'll go how to company that was doing 20 million dollars a year go out of business or 50 million dollars a year I've worked for those companies. I know exactly how they go out of business and it really comes down to they weren't making money They were shuffling money and this is just a misconception in business. I see a lot It's also not to get too off topic Well when someone starts raging about a company and not paying taxes on some reason It's because there's a lot of nuance to the way business works and I'm gonna specifically address it how it works in America But it really comes down to your profit margins, right? And you have all the money that comes in you can have 20 million dollars a year coming in But if you're spending 21 million dollars a year, this is how sometimes companies will say we had a loss You're like but you somehow seem to be selling a lot of your product or services But how do you have a loss and it really comes down to the money going out now? The way the tax system here in the United States generally speaking without getting overly detailed in it They've taxed you on what's left over on your profit, but that's the part. We really want to talk about though is are you? Profitable, right? Absolutely. Yeah, this is the part that really what it comes down to I've seen so many people start bragging or say Oh, you're only doing this much here. I'm like, but I'm doing it on this margin And that's really what you have to focus on if you run a lot of hardware through your company You can make the company look really big This is where we fall a little bit in between and we're talking about this and maybe this is a future topic Where we discuss why we don't bother trying to run every piece of hardware through our company We work a lot with clients who just decide they're going to hey I'm just gonna buy it myself. We're finding that we actually offer both scenarios for our clients We have clients that are like, hey, I don't want to deal with any of this I'm gonna pay you to deal with it right at the bottom or we have clients that say, you know what? I'm gonna buy the hardware myself because I know exactly what Dell server I want I know exactly which laptop I want I know which exact model and part number to buy and we are perfectly fine in both of these scenarios But yeah, we are this makes a huge difference when it comes to what your revenues look like and if you're focused only on Getting that annual revenue up and this was kind of a sad story I had a friend who that's pretty much was locked in his head. He wanted to get a pseudo friend Really get that revenue number up all the time and that was his bragging point I'm at two million three million four million a year He did this pretty quickly with his company only a couple years and he was bankrupt by year five because he was still Losing almost a hundred and two hundred thousand dollars a year He started with some initial seed money and you know, they sometimes refer to it as your burn rate If every year you lose a little what's your burn rate? Well, you keep burning until you hopefully hit a point where you start making money But one of the things that we take the time to do here me and Fred have talked a lot about process is document all the money Ingress and transaction processing and things like that and you know It's always something you need to keep your eye on and then focus on it One of the things as we've dropped some of the people and we've won some big contracts I've talked about this before where someone says I'm gonna buy the hardware Well, my people that were bidding against me the other competing IT firms wouldn't do that So in some ways I ended up making substantially more than them because we focused on the margin for it We focused on leveraging our Skill set and leveraging our knowledge for money because that's just a better way to do it If you are trying to just leverage making margin on product one you can end up You know looking like a bigger company But in the end that's always a race to the bottom because people figure out the prices And I know some places will speak channel partner only but they will cut out your margins and things like that It's kind of pain but my point in all of this is really keeping your eye on the ball in terms of your profitability If you're not thinking about it that way You're just churning money and that is something that I've run into so many people that they just are trying to get to these Higher revenue numbers without really taking a concise look at do you make money at what you do? Because if you don't start with that those higher revenue numbers are completely irrelevant because you're just bleeding money all the time Well, yeah, it's about I think it's about efficiencies, right? We got to become efficient in how we do things people we we bid out projects every day and Most those projects we win because we come in at a competitive rate, but are we losing money? Absolutely not and and we we because we become efficient in how we do things from our contractors to the to the Products that we we are supplying to to every little aspect of a project We're efficient so we can come in at a better rate We give them higher level service higher quality product at a better rate and still continue to make money We're not trying to sell pie in the sky, but what we're doing is we're selling efficiencies Yes, and but I'll admit and there's definitely a couple of things we well I'm not say we didn't even bid on and this was a funny one that Brett took a phone call for that What they wanted because we do like a co-managed it services offering and basically someone was reselling You know we have tools that we buy there's minimum buy into these tools and so smaller companies may want to buy them from us Because they can't meet the minimum survive directness is fine We'll work on different things that we provide value But what we won't do is mark them up almost zero percent just to get those numbers up And it turns out they were working with an IT company that we knew we know what these products cost And we're like they're selling to you basically at the cost. There's no point. We're not we're not money shufflers Undoubtedly the other IT company was doing it just to get their numbers up And of course, why are they calling us because when there's no margin in something you're selling? They're like, yeah, they don't answer the phone. They don't like talking to us They don't like doing anything other than sending us the bill for the tools we buy from but there's no help at all and configure You know, I'm like, well, you're they're giving to you everything at cost to get their numbers up or their goal is I don't know the other IT companies internal goals for this But I do know that selling things at no margin is something we said we're not gonna do and I said well We don't really want to put margin on I said then great You can call us for consulting if you need to and keep the product from the other guy I because we're not selling to you at that price because that is just basically, you know Cost plus 1% is what they were doing 1% any responses. I remember that that was that was boggled my mind how this company was able to do that and and and that client was was frustrated with the level of service, but Ultimately stayed with them to because but yeah, they still continue to call us and ask us questions when the real You know rubber meets the road Yeah, you talked a lot about Pricing for the future and you say that you I think we talked about that in a couple videos previous about Pricing for the future and that's what we've done because we're not here to just have the staff We have we're here to grow the staff We have and to be able to assist and help more people we have the price for the future for that our margin accounts for that Yeah, and this is something you have to really take into consideration You're doing a disservice by it's this weird concept that people have I need to give them the cheapest option My business plan was just to do it cheaper than the other person And I'm like no at some point you're doing a disservice because you're burning yourself out You're just shuffling the money to try to build up this big revenue number But if you didn't build it at margin you're not thinking about the margins you build on each one of those at some point You're not gonna be able to service the client You're not gonna be able to hire that next technician You're not gonna be hired for more technicians to put in place You're not going to mentally want to give that client could service because you're gonna go What do you mean you want more service out of me? I gave you the cheapest deal I'm making like 1% on you at some point I don't like servicing it and it's one of those things I mean generally speaking even as a business owner myself you'd outside of tech services, which obviously we perform other services I need I'm not looking necessarily for the lowest bidder. I'm looking for the best value I'm looking for something to be responsive and this goes directly to a construction project. I'm working on right now. I Said hey, I'm not looking for the cheapest. I already know the cheapest guy may or may not show up I need someone who's going to show up I need someone who's going to do the work properly. That's the part that's mattered for each step of the way for my new studio build Absolutely, we've had fun with that one too, haven't we? Yep. Yep, but yeah, that's just our thoughts for today Think about your margin Don't just think and look at how do you get to some number always think of do you get to that number? Profitably because you write ten million dollars a year and still go out of business next year because you are spending ten million point One or even twelve million a year because you had two million in seed money and boom after year one you burn through all of the seed money or capital you had to start the business and Unless you have the fairy godmother of venture capitals is dropping money on you For a bad idea, which is weird. That's a silicon Bailey thing. Don't it does happen sometimes Point though there it has to stop you go Can this be a profitable venture and if you're thinking about that the very beginning You're in a better position later before you're deep deep in a hole of I'm turning all this money and moving all these Parts and working 70 hours a week, but I could have made more money in the private sector Yes, you didn't think about margins. So those are my thoughts for today being Brett because by the way We're making money. We did our P and L and turns out we're profitable We lost some money last month. We made money this month and that's the ups and downs of it But the overall for the years looking really good. It's here in our final year-end. We're thinking about it And that little chart I made leave some comments down below if you'd like to see me do a video on how I process Money in and out of the company. I can definitely share that if someone's interested. Let me know Alright, it's time to make money not just shuffle it, right? Yep. Absolutely. So all right. Thank you And thank you for listening to my rant and Let me know what else you guys want to hear on this topics. Have a good one