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Cloud Accounting Podcast

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The Cloud Accounting Podcast is the #1 accounting and bookkeeping podcast in the world! Join Blake Oliver and David Leary at the intersection of accounting and technology for a weekly news roundup, plus interviews and demos with industry leaders.

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A rundown of QuickBooks Online news from #QBConnect
SponsorsOnPay: http://cloudaccountingpodcast.promo/onpayOnPay is offering an exclusive promo code only for the listeners of The Cloud Accounting Podcast to get three free months of OnPay payroll service for any of your clients that you set up by February of 2020! Visit the sponsor link, and use code "CAP3FREE" to take advantage of this offer! Show NotesQuickBooks Online Accountant gets AI injectionhttps://www.accountingtoday.com/news/quickbooks-online-accountant-gets-ai-injectionMore show notes coming soon! ConnectDavid DiNardo: https://www.linkedin.com/in/david-dinardo-mba-42344599/Valerie Heckman: https://www.linkedin.com/in/valerieheckman/Get in TouchThanks for listening and for the great reviews! We appreciate you! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, please do us a favor and write a review on iTunes, or Podchaser. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus. Meet Blake and David in person! December 9-11: Digital CPA Conference in SeattleLimited edition shirts, stickers, and other necessities.TeePublic Store: http://cloudacctpod.link/merchSubscribe Apple Podcasts: http://cloudacctpod.link/ApplePodcasts Spotify: http://cloudacctpod.link/Spotify Google Play: http://cloudacctpod.link/GooglePlay Stitcher: http://cloudacctpod.link/Stitcher Overcast: http://cloudacctpod.link/Overcast   TranscriptComing soon!
Getting to know Acuity LIVE from AcuityCon in Atlanta
SponsorsOnPay: http://cloudaccountingpodcast.promo/onpayOnPay is offering an exclusive promo code only for the listeners of The Cloud Accounting Podcast to get three free months of OnPay payroll service for any of your clients that you set up by February of 2020! Visit the sponsor link, and use code "CAP3FREE" to take advantage of this offer! Show NotesComing soon!Connect with the Acuity Team Acuity: https://acuity.co/ Matthew May, Founder, VP Sales and Marketing LinkedIn: https://www.linkedin.com/in/thetechcpa/ Twitter: @thetechCPA Kenji Kuramoto, Founder & CEO LinkedIn: https://www.linkedin.com/in/kenjikuramoto/ Twitter: @kenjikuramoto Lisa Gilreath, VP of Operations LinkedIn: https://www.linkedin.com/in/lisa-gilreath-2ba506a/ Twitter: @lkgilreath Ann O'Dea, Controller Team LeadLinkedIn: https://www.linkedin.com/mynetwork/invite-sent/ann-o-dea-a61263118/ Sammy Siddique, Cloud Accounting Team Lead LinkedIn: https://www.linkedin.com/in/sammy-siddique-64446932/ Twitter: @sammy3042 Graham Wood, CFOLinkedIn: https://www.linkedin.com/in/grahamwoodjr/ Kai Moon, Senior Customer Success Advocate LinkedIn: https://www.linkedin.com/in/hikaimoon/ Twitter: @hikaimoon Get in TouchThanks for listening and for the great reviews! We appreciate you! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, please do us a favor and write a review on iTunes, or Podchaser. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus. Meet Blake and David in person!  November 5-8: QuickBooks Connect in San Jose November 5: Practice Ignition PreCon Party in San Jose November 6: VIPartners Party with Gusto, Routable & Jirav in San Jose December 9-11: Digital CPA Conference in Seattle Limited edition shirts, stickers, and other necessities.TeePublic Store: http://cloudacctpod.link/merchSubscribe Apple Podcasts: http://cloudacctpod.link/ApplePodcasts Spotify: http://cloudacctpod.link/Spotify Google Play: http://cloudacctpod.link/GooglePlay Stitcher: http://cloudacctpod.link/Stitcher Overcast: http://cloudacctpod.link/Overcast   TranscriptComing soon!
#AccountexUSA: Meet Cash Flow Mike
SponsorsRight Networks: https://cloudaccountingpodcast.promo/rncloudShow Notes 00:17 – Meet Cash Flow Mike!  00:36 – Cash flow is king - It's how businesses keep their doors open 01:26 – Mike teaches banks effective methods for communicating with small-biz owners 01:50 – Mike teaches from the standpoint of necessary advising, instead of trusted advising 03:41 – Want to add advisory to your practice? Learn how to tap into your experiences and tell that story 04:49 – Mike says it's imperative to start with the end in mind - and map out that advisor/client relationship  06:55 – Since everything you do impacts cash flow, you need to know the reason why  you're making every single transaction 09:01 – Run your firm like you're going to sell it - keep it show-ready every day 09:34 – Stupid cash flow tricks  12:01 – You don't need fancy tools and software, but you do need to track everything - what's coming in, what's going out, and the timing of it all 14:15 – When it comes to cash flow, looking ahead gives you time and options 14:35 – Practice what you preach. When it comes to advisory, if you believe in what you're selling, why aren't you doing it?  15:20 – What comes in should match what's going out 18:39 – A discussion on how having more month than money and oversized growth affects startups like WeWork | NYT  Connect with Mike Milan Linkedin: linkedin.com/in/mikemilan/ Website: https://www.elevatefinancialtraining.com/ Get in TouchThanks for listening and for the great reviews! We appreciate you! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, please do us a favor and write a review on iTunes, or Podchaser. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus. Meet Blake and David in person!  November 5-8: QuickBooks Connect in San Jose November 5: Practice Ignition PreCon Party in San Jose November 6: VIPartners Party with Gusto, Routable & Jirav in San Jose December 9-11: Digital CPA Conference in Seattle Limited edition shirts, stickers, and other necessities.TeePublic Store: http://cloudacctpod.link/merch Subscribe Apple Podcasts: http://cloudacctpod.link/ApplePodcasts Spotify: http://cloudacctpod.link/Spotify Google Play: http://cloudacctpod.link/GooglePlay Stitcher: http://cloudacctpod.link/Stitcher Overcast: http://cloudacctpod.link/Overcast TranscriptMike Milan: We're gonna spend the next 10-25 years together. You don't just change accountants every week. If we're gonna spend that much time together, where are we going? Blake Oliver: Welcome to the Cloud Accounting podcast. I'm Blake Oliver. David Leary: I'm David Leary. Mike Milan: And I'm Cash Flow Mike. Blake Oliver: Now, is that your legal name, Mike? Mike Milan: Sure. Why not? No, my name is Mike Milan. Blake Oliver: Awesome.  David Leary: Thanks for coming, Mike. We're here at Accountex USA. We are at day two, doing a lot of interviews here. Blake Oliver: Yeah.  David Leary: I think, with your name, we should talk to you [00:00:30] about cash flow and small businesses. Blake Oliver: It seems appropriate. David Leary: It seems appropriate, but, before we jump in, why are you qualified to talk about cash flow? Mike Milan: Well, I can tell you, I've dedicated my life to it. I believe that that's the way that businesses stay in business. I've built 12 companies, so if anybody's had cash flow problems, or seen cash flow success, I think it's me. Blake Oliver: I've heard these stats ... Every year, there's a stat that Intuit or Zero talks about, how like 80 percent of businesses or something crash due to cash flow problems. That's the main [00:01:00] reason they fail. Is that right? Mike Milan: It is. It's 82 percent blame cash flow, in one way or another, as the reason that they failed. What's interesting is that 50,000 businesses filed bankruptcy; 35 percent of those have net profit. Blake Oliver: Really? Mike Milan: So, think about that. That's a cash flow problem. Blake Oliver: Right? Wow. So, they're profitable; they just can't keep the cash moving, and they have to shut down. Mike Milan: Yeah, exactly. Blake Oliver: Who are you talking to mostly? Are you talking to accountants? Are you talking to business people? Business owners? Who ...? David Leary: Banks? Who do you talk to? College students? You teach, as well?   Mike Milan: Yeah, that's right. I'm [00:01:30] actually a ... Ultimately, it's the small business owner; it's the guy that's out there actually trying to live his dream, trying to build what I call a lifestyle-friendly business. In order to do that, I'm talking to the people that actually deal with small business owners. I teach bankers; a course that we call Relationship Banking, which is more or less teaching bankers how to communicate with that small business owner. I work with accountants. Same thing. It's the same practice. You've gotta realize that those three people - the small business owner, the accountant, and the banker are all on a pedestal together. It's not the trusted [00:02:00] advisor in my world; it's the necessary advisor. That's what I want him to become, that necessary part of their life, right? It's a necessary advisor. You mentioned college courses. I'm on the faculty at the Graduate School of Banking at LSU. I've taught at the Graduate School of Banking at Colorado, and the Pacific Coast Banking School up in Washington. A little bit there, but it's all about banking. David Leary: One thing, I think, in my hallway conversations with you, Mike, is you talked about how all aspects of the business are related to cash flow. It's not like there's a tool, and you report out the future cash [00:02:30] flow. Every part of the business is going to affect cash flow. Mike Milan: Every decision. It depends on how you look at it. Every decision that you make has an impact on cash. And, again, most people get focused on the profit, but that's just the result. What I always say is if you wanna know what the future holds, you've gotta bring it to the present. That's why we do forecasting. That's why we do budgeting is to be able to bring that to the present and see how your decisions today will impact tomorrow's cash flow. It doesn't matter ... If I'm sitting here right now, there's an opportunity cost [00:03:00] in cash flow. I actually had to pay to come here to be with you guys to be interviewed on this. David Leary: Thank you for [cross talk] Blake Oliver: To be clear, you're not paying us. Mike Milan: I'm not paying you. That's right. Blake Oliver: I'm a CPA. I'm an accountant. I'm a bookkeeper. I want to get into helping my clients in a more proactive way; not just doing the compliance. I like cash flow as a great starting point for advisory because that's the [00:03:30] thing that needs to be monitored, probably, on a daily/weekly basis, right? If I've never done it before, how do I go about building that as part of my practice, what I'm doing for customers?  Mike Milan: That's a great question, and I'll tell you, this whole industry - accounting - has been transforming, since I came in. I used to be part of Finagraph, which is a cash flow company; app-based company. Basically, what I've learned is that there is a transition. People are trying to get into it. How do I start? I'm gonna say there's a new kind of advisor, a new kind of accountant [00:04:00] that's out there, and it starts with you. All of you, every accountant, every bookkeeper has a story. That story is, "I'm working with other clients. I have my own life experiences." You start there. You've seen things happen in your other clients' businesses that you can translate to somebody else. You don't know the concepts, if you don't know the math, don't worry about it. You've got life experiences, and that's the new advisor, in my mind, is the one that can translate and tell their own story. David Leary: If you're trying to advise a client, even if you haven't looked at their numbers yet, you can be like, "Hey, here's something that I have a client [00:04:30] do ... for example, people with payroll taxes; keeping those in a separate bank account, so when it's time to pay those ... It's just a tool that you can implement, and this is gonna help you not get a surprise at the end of a tax season and have to shell out a big old check, which you don't have the cash flow for." You don't even have to look at somebody's numbers, and you can still provide them advice regarding their cash flow. Mike Milan: Absolutely. I built - shameless plug for me - Clear Path to Cash, which is just a blueprint. It's eight steps, and it starts with - start with the end in mind. If [00:05:00] I'm the advisor, if I was an advisor right now; a bookkeeper or an accountant, I'd say, "Hey, listen, David, we're gonna spend the next 10-25 years together. That's the way I look at our relationship. You don't just change accountants every week. Where we going? If we're gonna spend that much time together, where are we going?"  Try to figure out what their transferable value number is. Now, you might not have heard that term. That's one that I use in banking. Transferable value is when you get done with this, how much money does it take you do whatever it is you want to do next? There's some calculations I have to get there, but that's where I would start is-  David Leary: That's [00:05:30] the 'I wanna live in a beach, and fish' or something [cross talk]  Mike Milan: -that's right. I wanna sit on the deck. I wanna travel the world. Whatever it is. Blake Oliver: Do you have a method? How do you actually deliver this service, or how do I deliver the service as an accountant? Mike Milan: Again, I've got just a strategy, a blueprint, but where I'd start with is let's start with the transferable value number. Then, every day [cross talk]  Blake Oliver: -I wanna make sure I understand that. That's the number I want to get out of my business at the end of it, or ... Mike Milan: At the end of it, and without relying on the sale [00:06:00] of your business. I want that to be gravy. What I want you do is take what we're doing today and make your profit - your transferable value number - a planned event, which means every month, we're working towards that goal, even if that goal is 20 years from now; because we're not gonna be surprised. We're not gonna wait til we're 65, and we sell the company ... We look at the check, and the check isn't enough, and all of a sudden, you've gotta go get a job. My job as an advisor is to keep you in business and make sure that you have your dream fulfilled at [00:06:30] the end. So, you're fulfilling dreams. David Leary: If I'm hearing you correctly, instead of just actual forecasting enough to, "Hey, I need to click on this AR; I've got these AP transactions I have to do; I need to make payroll," and really the day-to-day business functions, you're stepping back and saying, "Hey, look at ... You need to include the money you're taking out of the business as part of the long-term cash flow, and you need to be including that ..." Then, work everything off of that, backwards. Mike Milan: Pretty much. It's a planned event at the end. I'm gonna start here with what I need, [00:07:00] and then, again, work through the balance sheet or the income statement back. What's interesting about that is that ... You've talked about all the transactions. That's where I say that everything you do impacts cash flow. There's thousands of these transactions that happen every day, week, month. What I'm saying is, before you get to the transactions, know why you're making the transaction.   This episode of The Cloud Accounting Podcast is sponsored by Right Networks. In a perfect world, everyone would have 100 percent of their clients on a cloud-based accounting system using cloud-based apps, but the world isn't perfect, and clients have a wide range of needs. For some, this means using desktop-based software. That's where Right Networks comes in. Right Networks is your 100-percent accounting-focused desktop in the cloud that also includes an ecosystem of over 250 connected apps. As you and your clients take the journey to the cloud, Right Networks will be at your side innovating the best ways to leverage the true cloud future by investing heavily in cloud apps, like Transaction Pro and Autofy. They've created an always-on environment that supports 24/7 data transfer. Right Networks also offers no scheduled downtime for maintenance or application updates and meets the industry's highest security standards.  To join the more than 50,000 firms that use Right Networks daily with their clients, head over to CloudAccountingPodcast.promo/rncloud. That is Cloud Accounting Podcast dot promo forward slash R-N-C-L-O-U-D. Be sure to visit the Right Networks booth in San Jose at QuickBooks Connect 2019.  David Leary: It's [00:08:30] interesting, we did an interview - we haven't released it yet - at The Accounting Show LA, and it was about selling your firm. Ultimately, it's kinda the same thought process you're saying, which is, when you make the plan to sell your firm - on day one, when you start your business. It really aligns well with the vibe you're putting out here on this. Mike Milan: You know what's funny is I just wrote a blog and posted it yesterday on run your business like you're gonna sell it, right? Because what's the first thing you do?  If you're gonna sell your house, or sell your car, [00:09:00] what's the first thing you do? David Leary: Vacuum it and paint it.  Mike Milan: Yeah, you clean it up and all of a sudden, you've got a nice place, right? You're going, "Whoever buys this house is gonna have a nice house or have a nice car..." Why not do that to your business? Have it show-ready all the time, because you're gonna get the benefit of the cash that's coming off of it. It's gonna be operating healthily, or very profitably, and efficiently. Get that, because people will pay you more in the end for something that works right. The value will go up. If they come in, and they see that you're running around, and you have all these problems, nobody's gonna buy your problems for [00:09:30] premium dollars. Run your business like you're gonna sell it - that's what I say. David Leary: What are some of the cashflow mistakes you've seen, like nightmare stories? Besides like the guy who filed bankruptcy ... Have you seen some crazy hacks or workarounds people have done just to make cash flow work for them? Blake Oliver: No, no, I wanna hear the disasters. Mike Milan: Disaster? All right [cross talk]  David Leary: I'm sure people do very creative things. Blake Oliver: Yeah. Mike Milan: Well [cross talk]  David Leary: Floating checks ... Mike Milan: Yeah, the floating checks ... I've seen a guy buy a business with credit cards that he just [00:10:00] took out the credit card to get the cash advance, and give a cash advance over ... He bought a $350,000 business on credit cards he applied for all at once. David Leary: That's a lotta points. Mike Milan: That's a lotta points ... Isn't it? You could almost buy a house on points. Blake Oliver: Yeah, but that's very expensive. Mike Milan: Very expensive, right? You're talking 20-some-percent interest. There's other ways to finance your business outside of taking a big collection of credit cards to do it. That's the biggest thing. He lasted almost nine months in business, before [00:10:30] he couldn't keep up with the payments. That's the biggest disaster, because he actually bought a restaurant, put the money into the restaurant, had no operating capital because he financed the whole thing on cash advances, and then couldn't keep it open. Blake Oliver: Okay, so maybe that's an extreme example. What is- Mike Milan: You said disasters!  Blake Oliver: What are some ...? What did you say, David, like common ... Best practices, or ...? David Leary: Yeah, best practices or how to not create these situation,  because I think people get caught off guard. They have to collect ... They don't [00:11:00] have cash ... Not making payroll is probably ... I've heard about that; like you're not a real business owner until you can't make payroll once. That's when you really ... Now, you're truly a business owner. You have to make payroll. You've got to figure out how to pay your employees, right? That's when things get real, right?  Mike Milan: Exactly. The way I teach that, it's all about timing. You can make your profit and loss statement. You see how the revenue's coming in, and how it should look at the end. But, let's face it, that's not the timing of dollars, and I blame it on ... There's two types of accounting - cash-based, and what's the other one? Blake Oliver: Accrual.  [00:11:30] Mike Milan: Yeah, I call it cruel accounting - accrual. It's very cruel, because I think I have money, but I really don't. So, it's 'a cruel' accounting. That's what it is being able to look at the money as it comes in, in addition to how you expect it to be spent - inflows and outflows. There's two parts to it. Most people who do the first part will miss the second part and not understand the timing of payments.  David Leary: Are there easy tools ...? What's a small business owner supposed to do? Everybody says this, like, "Oh, cash flow; watch your cash flow." What [00:12:00] do they have to do? Mike Milan: I think it's a simple ... I mean, of course, there's lots of apps that are out there that they can use, but you might be in a position where you're like, "Hey, I don't have an accounting system that works with an app." It's as simple as just keeping track of what's coming in, and what's going out, and the timing of when that's gonna happen. You'll start to see things.  I used to own three restaurants. You don't have AR in the restaurants, but you have a daily sales. So, I would keep just keep track on the Excel spreadsheet - what comes in on Monday; what comes in on Tuesday, Wednesday, [00:12:30] Thursday ... I would do that by week, and I would leave notes to myself out on the end. "This was Mother's Day. That's why your Sunday was so great." It was just notes on why things happened. When I started graphing those numbers, I saw a pattern that developed through the year. Every year, I knew that right around St. Patrick's Day was one of my best months. The weather was turning in St. Louis to the better. People were starting to get out. I had better months in March than I did in July because it was too hot. People didn't wanna be in the restaurant, or out there. They wanted to be at the lake. Just [00:13:00] keeping track of what you're doing is the first basic step to understanding what's happening in your own business. David Leary: That sounds like you're saying timing is very important. It'd be interesting to see that pattern .... If you were gonna give your employees a bonus, maybe don't do it at Christmas. Maybe you do it in March, when you know the revenue is going to be there, and the timing's right. Mike Milan: Perfect. You'll be able to see that seasonality. What I like about it is if you start managing your cash balances that way, you'll start to see it happen, where you're like, "Oh, my God, I'm going into a three-month low period. I don't sell [00:13:30] as many swimsuits in November, December, and January," if I'm a swimsuit-shop person, "so maybe I should keep back some cash in September/October to be able to make my fixed expenses through that." You'll be able to see that and react. I was reading a book today; it was actually by the Dryrun CEO, "Pandemic Cash Flow." David Leary: "Pandemic Cash Flow," yeah, yeah. Blaine, yeah.   Mike Milan: He makes a statement ... I'm not gonna ... Nobody could say that more perfectly, and I'm gonna steal it from him. Blaine, I'm sorry, but it's ... What he says is it's the difference [00:14:00] between walking out into the street and not seeing the bus, or you see the bus coming, and you got time to react. You got options. You just walk out and get hit by the bus, which is not paying attention to cash flow at all, versus seeing it's coming down the block, and I've got options. I can cross. I can stay put. What you're doing by looking at it and looking ahead is actually giving yourself time and options. That's what it takes to satisfy most cash flow problems. Blake Oliver: Ironically, cash flow is often a problem in an accounting firm ...  I'm guilty of this. I do my [00:14:30] books last, right? How can I make sure that I'm managing my cash flow better? Mike Milan: Well, you should already have, we'll say, a blueprint for how you're going to advise your clients. Make that part of ... You put yourself right into the program. If you believe in it, and you believe that what you're saying to your clients really helps them, and helps them make more money, and have more time, and build that lifestyle-friendly business. then why aren't you doing it? Blake Oliver: So, what do I do? How do I make payroll? Mike Milan: How do you make payroll? Blake Oliver: Yeah.  Mike Milan: Okay, that's good, because you're gonna encounter the exact same issues they are. If you're [00:15:00] gonna give them advice on the timing of their collections- they've got people that are paying late; they've got maybe too much inventory, which you won't have that problem, but you probably have more of a collections problem than anything ... But you're also making purchasing decisions that could either be held off on; you could scale back. Here's an expense-control rule, and that's what you really have to do is exercise discipline, and expense control. Here's the rule - a change in gross profit should match the change in operating expense. So, if I have less gross profit, which is money to spend, I should spend less money. Blake Oliver: Right. Mike Milan: It should [00:15:30] be equal dollars. That's one quick rule that you can say, "Okay, well, I'm done $100,000 in gross profit, I need to cut expenses by $100,000." That's the quickest, easiest way to get expenses back in line. Blake Oliver: Challenges, of course, we've got ... Most of our employees are fixed costs in accounting firms; although, you could change that with outsourcing, or- David Leary: I think with accounting firms now, them going to that fixed fee, or getting paid upfront is gonna help. They've shifted that. Instead of an accountant giving services and then collecting maybe 90 [00:16:00] days later, you're getting the cash before you even provide the service. Blake Oliver: Yeah, and I can't believe there are firms that ... Actually, most firms operate this way, so I shouldn't say I can't believe it, but tracking your time; billing at the end of the month; waiting 30 to 60 days to get paid ... When the alternative is bill on the first of the month for that month, because you're operating on either a retainer or a fixed fee. Mike Milan: Yeah- Blake Oliver: [inaudible] engagement. That's what I did, so all of my cash would come in on the third day of the month, and I had that cash to pay all of my employees and contractors [00:16:30] throughout the month. My customers were financing my business, not the other way around. Mike Milan: That's right. That's the way it should be.  David Leary: I think I've talked to some accountants that are doing- they're billing their clients on fixed fee. But what they've done, they've set their clients up on every two weeks because it helps the cash flow situation for the clients, as well.  Blake Oliver: Well, now you could do it every week if you wanted to. It's like with the automated billing systems. Mike Milan: Right, yeah. You can set it up for any recurring-  David Leary: Which helps stabilize the expenses for their small business client.  Mike Milan: You brought up an interesting labor problem, though, especially if you have fixed costs in your labor [00:17:00] pool. I used to have a hotel staffing company. What we used was a labor utilization rate. Any time somebody's individual utilization - which means you're doing more non-billable time versus billable time - dropped below 75 percent, I started thinking I was overstaffed. That's how we decided, as a whole, I wanted everyone working at least 75-percent billable versus unbillable. Blake Oliver: Yeah, and that's one of those ... I think that's one of those metrics that, if you're an accounting firm that inventories your time, you try to track that very carefully, or you should be, anyway.  David Leary: Once [00:17:30] I solve my cash flow problems, is this something that, once I get ... I have my processes in place, let's say. Is it kind of set it and forget it, or do I need to be revisiting this constantly? Mike Milan: I think it's an exercise in discipline. Even successful companies ... I mean, look at it. In 1985, Home Depot, which I think we all think is successful, was 21 days from death- David Leary: Because of cash flow. Mike Milan: Because of cash flow, and because what they were doing is they were trying to do the growth model that Walmart had done, [00:18:00] which is a lot of build, build, build, and cash flow just outran. You can be so successful that you can do something that I call 'grow broke.' It isn't just that I had a problem, and I was being unsuccessful, and I didn't have enough money coming in to match. Sometimes, you can grow so rapidly that you actually outrun your operations. David Leary: Like all the startups- Mike Milan: Yeah. David Leary: -that fail with VC money. Blake Oliver: Now you can go public and be losing billions of dollars a year, apparently. So, the rules don't apply. Mike Milan: It doesn't apply at all.  David Leary: We talked about this on the podcast. WeWork, right? I guess WeWork's expenses is [00:18:30] greater than their income-  Blake Oliver: Their operating expenses are double their revenue, and they're gonna try and go public. Although, there was just this story- Rachel Fisch sent over this story about how they're gonna have to cut their valuation in half, maybe. That's gonna really screw up their IPO.  David Leary: From a cash perspective, how does that cash flow, long term, work? Like, how is this possible, if their operating expenses are 2X their income? How do you make that cash flow work? What would you do for WeWork to solve that problem? Mike Milan: With WeWork, basically what it's doing is that ... It's [00:19:00] okay to run in what's called a negative working capital cycle, which means you actually have your current liabilities are higher than your current assets. That's basically what they're doing, but they're also in a growth mode. There's gonna be a point in time when it flips. That's how all these tech startups in this room do is that they're gonna go expenses out, top end, and when the subscription-based model starts to flip ... Their R&D costs are coming down. They're back into maintenance or mainly just adding a few features. Yet the actual subscription model flips, and it [00:19:30] only works in high-growth, rapid-growth type organizations [cross talk] Blake Oliver: That's when your WeWork rent doubles. Mike Milan: That's right ... But those places are full; I mean, absolutely full, and they just keep adding them. Blake Oliver: There's demand. David Leary: So, if people wanna get a hold of you, Mike, and they wanna learn more about cash flow, locate you?  Mike Milan: I think I'm on the internet. My company's name is Elevate Financial Training, so it kinda says what I do. We have a product called Clear [00:20:00] Path to Cash. Any of those words, if you Google those ... elevatefinancialtraining.com, or clearpathtocash.com, or cashflowmike.com. Blake Oliver: All right. Mike Milan: Any way, you can get ahold of me. David Leary: Just cash [cross talk]  Mike Milan: Just cash me ...  Blake Oliver: As always, I am @BlakeTOliver on Twitter. And you, David?  David Leary: I'm @DavidLeary. Blake Oliver: Thanks for talking to us about cash, Mike. David Leary: Thanks, Mike.  Mike Milan: Hey, thanks for having me. I really appreciate this. This was a good time. Thanks.

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Podcast Details
Started
Nov 3rd, 2017
Latest Episode
Nov 13th, 2019
Release Period
Daily
No. of Episodes
131
Avg. Episode Length
30 minutes
Explicit
No
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