Podcasts about joseph you

Check our upcoming events: https://bit.ly/3whDgVo Tweetable quote from Joseph "You can know something, but if you don't do something to get the results that knowledge promises you, then nothing's going to happen." Summary In this episode, Dr Espen had the immense pleasure of celebrating the birthday of his personal hero, Joseph McClendon III, a renowned neuropsychologist and expert in ultimate performance. Join them as they dive deep into the concept of neuro-encoding, a methodology Joseph has developed to help individuals rewire their brains and nervous systems for peak performance. He emphasized the importance of "process over knowledge," and discussed the "toxic 10," a list of common psychological barriers that hinder our progress.

These famous words are from the story of Joseph: "You meant it for evil, but God meant it for good." The great truths that God is utterly sovereign, and that he is weaving everything together for a salvation purpose, all come to us in power as we trust in Christ. Genesis 50:15-26 Learn more about your ad choices. Visit podcastchoices.com/adchoices

The Sunday after Christmas: In the Fullness of Time Isaiah 7:14-16, Galatians 4:1-7, & St. Matthew 1:18-25 by William Klock St. Luke tells the story of Jesus' birth, from the perspective of Mary.  In Luke's Gospel we see an angel come to a young girl to announce that she will bear Israel's Messiah.  We get a sense of her excitement.  Everyone was, after all, waiting for the Messiah.  Most people would have expected him to be born in a palace, so imagine Mary's utter shock to learn that she was to be the one.  Yes, her family had descended from David, but they weren't royals by any stretch of the imagination.  They were just simple, common people. St. Matthew, on the other hand, tells the same story from the perspective of Joseph.  He was anything but excited to hear the news that Mary was pregnant.  It's not hard to imagine the disappointment, the embarrassment, even the shame that he felt.  “It's not another man,” Mary told him.  “I'm pregnant by the Holy Spirit.  That's what the angel told me.  I don't understand how it can be, but he told me that this child is the Messiah.” Joseph knew where babies come from.  This was going to bring shame on him and so, Matthew says, Joseph made plans to quietly separate from Mary—to break off the engagement.  Hopefully he could distance himself from the whole fiasco, save some face, move on with life, and maybe find someone more respectable to marry. But then the angel appeared to Joseph.  “Joseph, son of David!” the angel greeted him.  Joseph was also a descendant of King David, but so were a lot of people.  This was the first time anyone had ever addressed Joseph as if he were a prince.  But the angel's making a point: Joseph is part of the royal family—the family from which the Messiah would come.  “Joseph, don't be afraid to follow through with this marriage to Mary.  She wasn't lying when she told you she was pregnant by the Holy Spirit.  She's not crazy.  A miracle has really happened.  She's going to have a son.  And, listen, when he's born, you are to name him ‘Jesus'.  Why?  Because he's the one who will save his people from their sins.” “Joseph, don't be afraid!”  This is where Mary's story and Joseph's story intersect.  When the angel appeared to Mary he said the same thing to her: “Don't be afraid!”  This is what happens every time someone in the Bible is met by an angel or given a message from God: Don't be afraid.  God announces that he's about to do something.  Maybe what he says he's going to do is itself scary and frightening.  Maybe it just seems crazy and impossible.  Sometimes it's something that sounds incredibly foolish.  This announcement about the baby, conceived by the Holy Spirit and the angel's urging Joseph to go ahead and marry Mary pretty well hits all these points.  If any two people needed this exhortation to “Fear not!”, Joseph and Mary needed it. But maybe we need it too as we read the Christmas story.  Is it really necessary to emphasise this particular part of the Christmas story?  I know a lot of people believe it, but they don't want to talk about.  It's fine for us, but people out there are going to think we're superstitious or naïve for believing in a virgin birth, because these things don't happen in the real world. There are people who throw this story out because they associate it with the later legend that grew up about Mary's supposed perpetual virginity and the teaching closely associated with it that sex is sinful or dirty.  Of course, the Bible says none of these things.  The Gospel-writers give us every reason to believe that after Jesus was born, Joseph and Mary went on to have a perfectly normal married life and to have other children.  The reason Matthew and Luke tell us this story is because they believed it was true.  They had their own reasons to be afraid in telling it.  The pagans told stories about half-human men and women fathered by the gods.  Ancient mythology is full of those stories.  Matthew may have been afraid that people would think he was somehow borrowing from these myths.  He surely knew that some people would say that in reporting that Mary was pregnant by the Holy Spirit he was just covering for some indiscretion on Mary's part. Other people have said that Matthew invented this part of the story so that he could claim Jesus' birth was a fulfilment of Old Testament prophecy—the verse he quotes from Isaiah 7.  What's interesting about that is that there is no evidence whatsoever that anyone before Matthew had ever thought of Isaiah's prophecy being fulfilled in the birth of the coming Messiah.  No one had ever made the connection.  Isaiah's prophecy was fulfilled in the days of King Ahaz.  Everyone knew that.  It was actually Matthew, knowing what Isaiah had said and the history that surrounded that prophecy, who saw there a sort of prefiguring of Jesus. There are all sorts of ways that people find something to be afraid of in this story—all sorts of reasons people find to reject it.  Neither Matthew nor Luke asks us to simply take their word for it.  Notice that Matthew, in particular, connects the story of Jesus' birth with a much bigger story—with the story of Israel and of Israel's God.  It's almost as if he was anticipating that someone would say, “Virgin birth?  Right, Matthew.  At your age, how can you not know where babies come from?  To the person who says, “The world doesn't work this way” and to the person who might say, “God doesn't work this way”, Matthew says, “Wanna bet?”  And he points us back to look at just how God has worked in history. This is the point of Matthew's quote from Isaiah 7 about the virgin conceiving and bearing a son named Immanuel.  Matthew ties the birth of Jesus into the larger story of redemption and the larger story of Israel and Israel's God. So roll the clock back about 730 years before Jesus was born.  That's when the events of Isaiah 7-9 took place.  It was a time in Israel's history when things were looking very bad.  The kingdom had been split for roughly two hundred years: Israel in the north and Judah in the south.  Ahaz was king of Judah.  Ahaz is one of those guys we read about in the book of Kings of which it is said, “He did evil in the sight of the Lord”.  It's worth noting that in pragmatic political terms, Ahaz was a pretty good king.  He played the political and foreign policy game in a way that kept Judah safe.  But that isn't how God judges kings.  The Lord had told his people to trust in him, not in foreign alliance with pagans, not in horses, not in chariots.  But those were the things Ahaz trusted in.  Assyria was the great power of the day and it threatened everyone around.  Israel and Syria made an alliance with each other for their security, but they still weren't strong enough.  The kings of Israel and Syria put pressure on Ahaz to bring Judah into their alliance. Ahaz could see that there was no hope in aligning himself with Israel and Syria and, instead, submitted Judah to the sovereignty of the Assyrians.  While he was in Assyria he fell under the influence of Assyrian religion.  When he returned to Jerusalem, he built an altar like ones he had seen in Assyria and had the temple re-arranged to accommodate it.  He introduced Assyrian astrological practises to Judah.  He even sacrificed one of his sons to the Assyrian god, Moloch.  In the midst of this, the Prophet Isaiah came to Ahaz. Isaiah was sent by the Lord to Ahaz the first time as the kings of Syria and Israel were urging Ahaz to ally with them against Assyria.  Isaiah didn't go alone.  The Lord told him to take his son, Shear-jashub, which means “A Remnant shall return”.  The message the Lord was sending through Isaiah and his son was a familiar one: “Don't be afraid”.  Israel and Syria were threatening to swoop down on Jerusalem with their combined armies, but the Lord said to Ahaz: “It shall not stand”.  The Lord was urging the king to trust in him.  He also said, through Isaiah, “If you do not stand firm in faith, you shall not stand at all.” Ahaz waffled rather than standing firm.  The Lord warned him not to ally with Israel and Syria and Ahaz didn't, but it wasn't because of the Lord's warning.  Ahaz was afraid of Israel and Assyria and so, rather than trusting the Lord to take care of Judah, he was considering submitting himself and his people to Assyria.  And so the Lord sent Isaiah to him again with another warning.  This is the passage that Matthew draws on.  Isaiah said to the king: Look, the young woman is with child and shall bear a son, and shall name him Immanuel.  He shall eat curds and honey by the time he knows how to refuse the evil and choose the good.  For before the child knows how to refuse the evil and choose the good, the land before whose two kings you are in dread will be deserted.   What the Lord was saying to Ahaz was, “Look.  Trust in me.  Don't trust in horses, don't trust in chariots, don't trust in pagan kings and pagan gods.  Trust in me and I will take care of you.  I am your God and you are my people.”  The Lord had Isaiah mention a young woman.  The Hebrew word refers to an unmarried girl.  Some Bible versions translate this as virgin, because, being unmarried, the girl was presumably a virgin, but this isn't a reference to Mary or to an earlier miraculous virgin birth.  We don't know who this girl was, but it seems to be someone known to the king.  It might have been one of the women in Isaiah's circle of disciples or it may have been a princess in the king's family, but whoever it was, Isaiah tells the king that she's going to have a child and he is to be named Immanuel.  Immanuel means “God is with us”.  And the Lord tells the king that by the time this child is eating solid food, by the time he's old enough to know the difference between good and evil, he, the Lord himself, will put an end to the threat posed by the kings of Israel and Syria.  Again: Don't trust in horses.  Don't trust in chariots.  Don't trust in pagan kings and pagan gods.  Trust in the Lord and walk with him. That wasn't the end of it.  The Lord sent Isaiah a third time to the king.  This time a woman referred to as “the prophetess”—probably Isaiah's wife—had borne a son named Maher-shalal-hash-baz, which means “the spoil speeds, the prey hastens”.  The Lord's message was again for Ahaz to trust in him.  Before this child was old enough to say the words “father” and “mother” the Lord would deal with the threat of Israel and Syria.  Again, don't trust in pagan kings and pagan gods, trust in the Lord.  “God is with us,” declared Isaiah.  “The Lord of hosts, him you shall regard as holy; let him be your fear, and let him be your dread.  He will become a sanctuary, a stone one strikes against; for both houses of Israel he will become a rock one stumbles over—a trap and a snare for the inhabitants of Jerusalem.” Now, is the Lord faithful?  Does he do what he promises?  Of course.  What the Lord promised was exactly what happened.  In a short time the king of Assyria crushed Syria and Israel.  The northern kingdom was destroyed and the people scattered.  The Lord delivered the people of Judah.  Ahaz, not surprisingly being the wicked king he was, made an alliance with Assyria anyway and brought the worship of the Assyrian gods to Israel.  His son, Hezekiah, spent most of his reign trying to undo the evil his father had done.  Judgement eventually came on Judah too, just as it had on Israel, because the kings of Judah—with a few notable exceptions—failed to trust in the Lord. Now, back to Matthew.  Why does he quote this prophecy about Immanuel that was fulfilled seven hundred years before?  Matthew does this because in the story of Isaiah and Ahaz we see how God works.  We see God's goodness and his faithfulness to his people and his call to his people to consistently trust in him.  We also see God's warning of judgement when his people are unfaithful to him and to the calling he has given.  Israel was, yet again, in another awful political spot in Matthew's day.  This time it was Rome, not the Assyrians.  Just as Ahaz turned to horses and chariots and to forbidden alliances instead of trusting the Lord, the Jews of Matthew's day were trusting in all sorts of things other than the Lord.  Jesus spent his entire ministry rebuking these different parties and interest groups.  The Zealots were ready to take up arms in a violent revolution.  The Essenes went off to hide in the desert and denounced everyone else as unfaithful.  The Sadducees sort of took the “If you can't beat 'em, join 'em” tack.  All of them needed to be reminded of who they were and to whom they belonged—and in whom they had every reason to trust. Isaiah made use of three different children.  Matthew could have pointed back to any one of them.  Just think, we could be singing “O come, O come, Maher-shalal-hash-baz” every Advent.  But Isaiah points back specifically to the child named Immanuel, “God with us”, because it is a poignant reminder that in Jesus, God truly is with his people.  This is what the people of Matthew's day needed to hear as a call back to faith in the Lord and in the Lord alone.  But in an even deeper way, in Jesus, the Lord is with us in a way he never has been before.  Whereas in Isaiah's day, the virgin and her child were a sign that the Lord was about to act, this time it was the child in whom the Lord was coming to take the decisive act in Israel's history.  In this baby born of Mary and the Holy Spirit—God became incarnate, God became one of us—to once and for all deliver his people from bondage and to make all things new.  And this leads Matthew directly to the angel's instruction to Joseph: You shall call him Jesus, for he shall save his people from his sins. Jesus, Yeshua and its slightly longer form, Yehoshua (Joshua in English) were common names.  It means “Yahweh Delivers”, which made it a popular name amongst Jews, but it was made even more popular because the most famous Joshua of all time was the Joshua who took over from Moses and led the Israelites into the promised land.  Jesus is not only God with us, but he is the one who will, like Joshua, fulfil what was begun in the Exodus.  Joshua led the people into the promised land and Jesus will free his people from their bondage to sin and death and lead them into the life of the age to come.  Matthew highlights the important truth for us that Jesus didn't just appear at any old point in history to any old group of people.  He came in the fullness of time, as St. Paul writes in our Epistle from Galatians.  He came when the time was just right.  He came as part of a much bigger story.  He came as the fulfilment of a promise to a people who had struggled, themselves, to be faithful.  He came to die for the sins of his people, to make them clean, and to fill them with his Spirit—again, to fulfil the story and to make good on God's promises—so that they—and, eventually, so that we, incorporated into their story—can truly love God with hearts and minds made new. This is what Paul is getting at in our Epistle, Galatians 41-7, where he writes: When the fullness of time had come, God sent forth his Son, born of woman, born under the law, to redeem those who were under the law, so that we might receive adoption as sons. And because you are sons, God has sent the Spirit of his Son into our hearts, crying, “Abba! Father!” So you are no longer a slave, but a son, and if a son, then an heir through God. Brothers and Sisters, this is the story into which we have been baptised.  Think about that.  What's the formula we use in baptism?  It's in the name of the Father, and of the Son, and of the Holy Spirit.  I don't think we think about this in terms of the story of redemption—at least not as much or as often as we should.  We too often think of this formula as specifying which God we're putting our faith in.  You know, I'm not baptizing you into the Mormon God or into Zeus or Krishna or the Great Spirit.  I'm baptizing you into the Triune God who exists as Father, Son, and Spirit—three in one and one in three.  That's part of it, but the more important aspect of it is that this is the God who has acted in history to redeem us and to redeem his Creation. We are baptised in the name of the Father meaning that we are being incorporated into the family of the God of Israel whose kingdom will come in judgement and restoration.  It means we are being baptised into the family that Isaiah called on to trust wholly in our God, for he is good and faithful.  When we look around at the sin and pain in the world, we can know that we belong to the God who is making all things new.  He is our God and we are his people.  As Jesus said and as Paul writes here, through our union with his Son, Jesus, we are the Father's adopted sons and daughters and can approach him as “Abba, Father”. We are baptised into the name of the Son, who in his own baptism committed himself in obedience and in faith to the saving plan of his Father—trusting not in human means and human plans, but in the goodness and faithfulness of the God of Israel.  Baptism into the name of the Son, also expresses a commitment to taking up our crosses as we follow him, knowing his promise of rejection, persecution, and even martyrdom for those who follow.  We are baptised, as Paul writes, into his death.  But we are also baptised into his resurrection.  When we are tempted to fear, we need only remember our baptism.  God has vindicated his Son and he will vindicate his adopted sons and daughters as well. And, finally, to be baptised into the name of the Holy Spirit is to be baptised into both a new life and a new mission.  Jesus gave the Spirit to his people to fulfil what had been promised long before—to give fallen men and women new hearts capable of trusting, obeying, and loving God.  But the Spirit also makes us a prophetic people—a people called to proclaim the good news to the world, the good news that this Jesus, born of Mary, who died and rose again, is the world's true Lord.  It is a call to the world around us to stop trusting in horses and chariots, in money, power, and sex, false gods and pretender kings, and to come to Jesus and to be baptised as we have—to submit to the Father's plan, to take up our crosses daily as we follow the Son into the life of the age to come, and to take up this Spirit-filled ministry of proclamation until he comes again.  There is no doubt that the task we have been given is a hard one, but Brothers and Sisters, today we are reminded: God is with us. Let us pray: Almighty God, you have given your only-begotten Son to take our nature upon him, and to be born of a pure virgin:  Grant that we, who have been born again and made your children by adoption and grace, may daily be renewed by your Holy Spirit; through our Lord Jesus Christ, to whom with you and the same Spirit be honour and glory, now and for ever.  Amen.

To support the ministry and get access to exclusive content, go to: http://patreon.com/logicalbiblestudy Matthew 1: 18-24 - 'How Jesus Christ came to be born.' Catechism of the Catholic Church Paragraphs: - 497 (in 'Mary's Virginity') - The gospel accounts understand the virginal conception of Jesus as a divine work that surpasses all human understanding and possibility: “That which is conceived in her is of the Holy Spirit,” said the angel to Joseph about Mary his fiancée. The Church sees here the fulfillment of the divine promise given through the prophet Isaiah: “Behold, a virgin shall conceive and bear a son.” - 333 (in 'Christ with all his angels') - They protect Jesus in his infancy, serve him in the desert, strengthen him in his agony in the garden, when he could have been saved by them from the hands of his enemies as Israel had been (abbreviated) - 437 (in 'Christ') - God called Joseph to “take Mary as your wife, for that which is conceived in her is of the Holy Spirit,” so that Jesus, “who is called Christ,” should be born of Joseph's spouse into the messianic lineage of David (abbreviated) - 486 (in 'Who was Conceived by the Holy Spirit') - The Father's only Son, conceived as man in the womb of the Virgin Mary, is “Christ,” that is to say, anointed by the Holy Spirit, from the beginning of his human existence, though the manifestation of this fact takes place only progressively: to the shepherds, to the magi, to John the Baptist, to the disciples (abbreviated) - 430 (in 'Jesus') - Jesus means in Hebrew: “God saves" (abbreviated) - 452 (in 'The Only Son of God') - The name Jesus means “God saves.” The child born of the Virgin Mary is called Jesus, “for he will save his people from their sins” (Mt 1:21): “there is no other name under heaven given among men by which we must be saved” (Acts 4:12). - 1507 (in 'Heal the Sick') - The risen Lord renews this mission (“In my name . . . they will lay their hands on the sick, and they will recover.” and confirms it through the signs that the Church performs by invoking his name. These signs demonstrate in a special way that Jesus is truly “God who saves.” - 1846 (in 'Mercy and Sin') - The Gospel is the revelation in Jesus Christ of God's mercy to sinners. The angel announced to Joseph: “You shall call his name Jesus, for he will save his people from their sins" (abbreviated) - 2666 (in 'Prayer to Jesus') - But the one name that contains everything is the one that the Son of God received in his incarnation: Jesus. The divine name may not be spoken by human lips, but by assuming our humanity. The Word of God hands it over to us and we can invoke it: “Jesus,” “YHWH saves" (abbreviated) - 2812 (in 'Hallowed be Thy Name') - Finally, in Jesus the name of the Holy God is revealed and given to us, in the flesh, as Savior, revealed by what he is, by his word, and by his sacrifice (abbreviated) - 744 (in 'The Spirit & the Church in the Last Days') - In the fullness of time the Holy Spirit completes in Mary all the preparations for Christ's coming among the People of God. By the action of the Holy Spirit in her, the Father gives the world Emmanuel, “Godwith-us” (Mt 1:23). Got a Bible question? Send an email to logicalbiblestudy@gmail.com, and it will be answered in an upcoming episode! --- Send in a voice message: https://anchor.fm/daily-gospel-exegesis/message

Who has Jesus come for? The angel told Joseph: “You shall call his name Jesus, for he will save his people from their sins.” His name means “The Lord saves,” because He will save his people from their sins.   But who are “his people?” Who is it that Jesus has come to save?   Now, from our vantage point the answer seems obvious: Jesus came for all people!   But when Jesus first showed up, it wasn't quite so obvious. After all, Jesus is the Messiah, the Anointed One of Israel, a Jewish Savior for the Jewish people. And of course, Jesus did come for Israel.   But more than that, Jesus is the hope of all the world! It's interesting that Matthew has already hinted at the fact that Jesus has come, not just for Israel, but for the entire world. Matthew goes out of his way in the genealogy from chapter 1 to show us not only that God can work scandals to His glory but also that God is including Gentiles (non-Jewish people) in His redemptive plan.   And just so we don't miss the point that Jesus came for all people, this passage in Matthew 2 with the three Wise Men, the Magi, emphasizes that Jesus is the Savior of the world.   From the story of the Magi, we learn three things:   The Magi: God makes Himself knowable. Are you listening? The Quest: God makes Himself findable. Are you seeking? The Offering: God makes Himself receivable. Are you welcoming?   Who has Jesus come for? He's come for you.   Matthew 2:1-12   Living the Message episode: https://youtu.be/gZd4b5uwuBE   Questions about this sermon can be emailed to livingthemessage@moodychurch.org.

This is week 2 in our series on the life of Joseph and we will be studying the cycles of betrayal and injustice that lead to him to encounter extreme disappointment.  There is no clearer indication of that, than how Genesis 40 concludes by saying that Joseph had been “forgotten.” When we are stuck in disappointment we feel forgotten. However the Midrash (Jewish interpretation of the Old Testament) states about Joseph: “You may have forgotten him, but I the Lord have not.”  In light of that certain fact, we want to focus on some ways that we can redirect our hope and faith to the Lord in times of disappointment. We'll land on a few practical things we can do to be faithful in those seasons of distress. Senior Pastor - Chuck Angel

These famous words are from the story of Joseph: "You meant it for evil, but God meant it for good." The great truths that God is utterly sovereign, and that he is weaving everything together for a salvation purpose, all come to us in power as we trust in Christ.

In this episode of the In The Club Podcast by Club Colors, John features Joseph Gonzalez, certified Kolbe consultant, high energy speaker, confidence creator, thought leader, and top person ambassador.Joseph talks about his own brand of coaching and how transparency is the best tool to effect the change his clients need. He shares the need to ask difficult questions to the right people to determine the course of action that reaches their goals.He also shares the many nuggets of wisdom he has learned through the years, from leaning on your authentic self to never leaving anybody behind as you grow. In today's world, Joseph discusses LinkedIn and how to best engage the people you want to make an impact on.  HIGHLIGHTSIn the Game Group: Coaching and asking tough questionsTransparency as the biggest obstacle to growthDefine your give and pull up those below youEngagement on LinkedInIn the mirror: I can, I will, I must; Show Up and Show Out; Go Out and PerformQUOTESJoseph: "My mental preparedness is always expecting the best outcome but always knowing that, at times, it's not going to work out right when I walk in."Joseph: "An organization is run based on his team. If your team isn't operating, your organization isn't going to run. I don't care what your numbers are, what you think your profit and loss was, how much money you made, your revenue's busting through the roof. That's cool. But how do your people feel?"Joseph: "So many people are surrounded by individuals that just continue to badger them and tell them that they can't, that they'll never do it, and that there's no way out of their hole. And to me that's insulting, that's inhumane, that's disrespectful. And I can't accept that."Joseph: "You don't have to change your surroundings, just change their role in your life."Joseph: "If you can control your mind while sitting on fire, you can control your mind to do anything in life."Connect with Joseph by clicking the link below:LinkedIn: https://www.linkedin.com/in/joseph-gonzalez-dapm-lssgb/

Chad is an absolute pioneer when it comes to cryptocurrency and NFTs in the restaurant space. In this episode, he takes the time to break down the basics of the blockchain, crypto and NFTs, how restaurants can capitalize, and what the future looks like in this space. It's a brave new world and Chad's company Devour is one you'll hear about more and more. Chad has spent his entire career in the restaurant technology sector. He and his fellow co-founders at Devour began paying attention to blockchain, crypto and NFTs in the restaurant space in 2020. With non-fungible tokens (NFTs), one is different from the other. That means they can have different utility, value, etc. We're currently at the early phase of NFTs becoming mainstream and delivering various benefits. People assigned value to NFTs because they were a new thing, but then they realized that there was a status associated with owning an NFT. For restaurants, some NFTs are focused on utility. Gary Vaynerchuk's restaurant, Flyfish Club, is billed as “the world's first NFT restaurant, and uses NFTs to give token-holders access to the restaurant. NFTs are the most useful technology for restaurants right now. Crypto is less useful because it doesn't solve a current problem for restaurants. Restaurants can give away NFTs, make customers earn the NFT or sell the NFT. NFTs can be used by restaurants to give token-holders exclusive access to various menu items. The metaverse is an online space that utilizes the fundamentals of the blockchain. It can incorporate cryptocurrency or NFTs. There's not much use right now for restaurants in the metaverse. The keys for widespread NFT adoption and understanding are increased use in gaming and increased use by big brands. Quotes “I like to put (blockchain) in really simple terms. It's a kind of database. A database that's very, very difficult or near impossible to hack. All the information is there, it's secure and it's visible to everybody.” - Chad “NFTs really started to come onto the scene in 2019, and 2021 was an insane year for them and 2022 will be even bigger.” - Chad “There's a lot of value that can be assigned to NFTs to unlock real world experiences. So NFTs are the very first thing that restaurants can get a ton of value and utility out of.” - Chad “Because NFTs are registered on the blockchain, the blockchain essentially serves as verification of authenticity. So when someone shows their NFT, there's gotta be a way for the restaurant to ensure that that NFT is, in fact, registered on the blockchain and is an authentic NFT.” - Joseph “You can't get a burger in the metaverse, but you can create a virtual restaurant.” - Chad “If there's going to be a team that's going to help restaurants navigate this crazy, always-evolving world well, it's going to be (Devour).” - Chad Transcript 00:00.00 vigorbranding Hey, everyone today I'm joined by my friend Chad Horn he is the co-founder of devour which is a lovely word and a lovely name. Um, we are going to get into the nitty-gritty of devour but also everything that they're touching on right now. I'm really excited about this episode. Um, but before we hop in chat say hello give a little bit of backstory. 00:17.10 Chad Horn _ Devour Hello Joseph first. Thank you for having me on your program this morning a quick backstory on me is I've done my whole career virtually in the restaurant technology sector so you know that's where I fell in love with restaurants. Restaurant people restaurant companies anybody helping out restaurants and I also have been in partnerships roles. So it's been very active in forming collaborations with other companies and figuring out how to work together to serve the space. Um, so that's that's me in a quick quick. Yeah. 00:52.75 vigorbranding I Love it. So like I said we're gonna hop in to devour and and for those that don't know um you will find out but a very high level is you guys a

Scott's new book is titled Peace, Love, and Pasta. People always ask “What do you cook at home?” He thought it would be a great idea to put it all on paper! The thing he loves most about it is the simplicity. The recipes are easy to execute. Book Title - for years, Scott has been on a personal journey of self improvement and the title represents where he is and what he chooses to pursue. Past has been such an important part of his life and career.  It's an expression of his years of cooking. Even if the food experience is sub-par at a restaurant, just sitting and enjoying the company of people that he's with is what's really important. Future of fast casuals: There's a huge market for fast casuals and FSRs There are lots of high end chefs that are starting to do quick service or fast food Why is it hard to do Italian quick serve well? Needs to be served at the moment of order and that's challenging It's hard for people to wrap their heads around Italian food as a fast casual component Follow Your Bliss - Joseph Campbell It is not selfish to pursue your bliss One recipe to try in the book Risotto topped w/ short ribs Would You Rather Let Bobby Flay beat you on national television or eat a bowl of red onions? Quotes “You could make these recipes your own as you cook them” -Scott “The key is to shut it off and just try to enjoy yourself” -Scott, in reference to going out to eat as a chef and having an experience less than what he could have prepared at home. “Make sure you're making the best decisions for your business, for your team and the customers and clients that are coming in” -Scott “I think there's always going to be a place for fine dining” -Scott “Pastas just really are one of those long standing comfort foods” -Joseph “You're not going to get anywhere if you're not hustling” -Scott “All I want to do is realize my potential” -Scott “If anyone is counting their hours, you shouldn't be doing it” -Scott “Being passionate about something doesn't always equate to being good at it” -Scott

Background is in hotel operations. Started in western Canada. Knowing Hospitality came about after Adam was furloughed and saw that there was a need for independent hotel owners that didn't have the capability, bandwidth or desire or to run their own hotels anymore. It's helpful to change the view of restaurants and hotels from profit centers to looking at it as more of an amenity. Is this something that will drive room revenue? Will it build room occupancy? What can you build as a story around the restaurant in your hotel? How do you capture the people that live 5 or 10 blocks around you, especially in an urban community? Lifestyle hotel brands - Moxy, Aloft, Even Where can hotels find incremental revenue? Food tribes - if you find a restaurant that's doing this well and meets your needs, you'll go back time after time. In-room dining - offer things that enhance their experience Quotes “The thing that hotel restaurants have working against them primarily is you've got a perception issue a lot of the time”  -Adam “It's a lot easier to tell a story through design rather than trying to have a generic room that is applicable to the widest audience” -Adam “Ideation becomes a lot more natural and innovation becomes more comfortable when there's a very clear brand strategy that people within the organization and on the teams fully understand and adopt” - Joseph “This is where leaders get into a lot of trouble is they think of ideas as right or wrong or good or bad…. The question becomes what lens are you using to evaluate whether that merit fits the concepts that you're building?”  -Joseph “People need to do a better job of allowing or empowering patrons to quickly position and categorize the restaurant in their world” - Joseph “You can't complain about falling sales in your restaurant and do nothing to try to elevate the experience and make it a place that people actually want to go” -Adam “You can't just sell all the time, you've gotta create value for people” -Adam “Hotels have gotten really good at ticking boxes and not good enough at making some statements” -Joseph

Extended stay and select service brands are in their portfolio Trial and error and understanding the consumer more makes execution a lot easier You could have the best brand, the best food, the best offering but you still have to make the consumer happy Having the right conversation with a potential employee about what their career goals are is essential to hiring the right people. Having this conversation makes for more meaningful employment. Understanding how people's lives have changed and understanding what they need form an employer helps put them in a better position. Multiplying Company Culture How can you disseminate the culture from a central source? By multiplying culture, there's room for bad apples This is where consistency really comes in If you pick the right talent, they can understand what the end goals are quicker Future for PeachState Growth in different markets where they feel they can execute Old Fashioned w/ toasted pecans and anything savory on the menu. Loves bar fries. Quotes “Hospitality evolves every single day” -Ricky “Creating an offering where the locals like it and the locals want to be a part of it is very important versus just the guest…. What is the other offering that people in the area want to be around” -Ricky “Good F&B is fun” -Ricky “We need to start taking F&B much more seriously as ownership groups and hospitality management companies” -Joseph “You've got to understand the guest, if you don;t understand the guest, you can't offer what they're looking for” - Ricky “The basis of a great hotel experience is rooted in service” - Joseph “Authenticity is key” -Ricky “Hospitality talent will always come to hospitality” - Ricky That's just the hallmark of a great leader,someone who is not afraid and not hesitant to roll up their sleeves, get dirty” -Joseph “If we start with the why and end with the why, the how becomes so much easier” -Ricky

Join the discussion on Facebook!TranscriptJonathan:Hey everybody, Jonathan checking in here. And just so you know, this is a second part of the episode. So if you've not listened to the first part yet, you want to go back and listen to it in the prior weeks. We should have it labeled on the episode title what part one is and part two is. So you should be able to see that in the title of the episode it is what episode of episode it is. So thanks.Jonathan:Welcome to the Tooth And Coin podcast, where we talk about your adventure of being a dental practice owner. In these episodes we're going to be talking about problems that you will likely face as a practice owner, as well as give an idea about actionable solutions that you can take so that you can get past this problem in your practice. Some of these concepts are really big ones, some of them are very specific, but we hope that these episodes help you along with your journey. Now, a very important piece for you to understand is that this is not paid financial advice. This is not paid tax or legal advice. We are not your financial advisors. We are not your CPAs. This is two CPAs talking about informational and educational content to help you along with your journey. It's a very important piece for you to understand.Jonathan:Another thing that you need to know is if you enjoy today's content, join us on the Facebook group. So we've got a Facebook group that is active with dentists that is going to have content talking about what we're talking about today to continue the discussion. Agree with us, don't agree with us, have a story to tell, have something to share? Join us in the Facebook group. If you go to Facebook and you search for Tooth and Coin podcast, click on it to join it, and be able to join us there.Jonathan:Finally, if you need some more help, we're developing a list of resources that are going to be centering it around our topics of discussion to be able to help you a little bit more than what the content is doing. So if you'd like access to that whenever it becomes ready, all you have to do is text the word toothandcoin, T-O-O-T-H-A-N-D-C-O-I-N to 33444. Again, that's toothandcoin, all one word, no spaces, to 33444. Reply with your email address, and we'll email you instructions on how to get into the Facebook group. As well as add you to a list to be able to send you those resources when they're available. And if they're available, we'll go ahead and send them to you as well.Jonathan:So onto today's episode, hope you enjoy it.Jonathan:We work with around 250 offices, and we see there are just differences in dental practices. So a P&L, to me, is a fantastic thing to look at to have an understanding what's happening. But to me, you have to be financially savvy enough to calculate out that seller's discretionary earnings in order to be able to calculate what the actual profitability of this practice is on a dollars and cents perspective. Once that is done, you would then look at those different key categories, which again is another area where I find a lot of dental practices financials don't have things properly segmented inside of their financials. So you can't do that. So the presentation of the P&L for dental practices is just as important as the understanding. Because you and I could look at a financial statement that would come to us, and if it's not a really, really well-defined P&L.Jonathan:I mean, we've seen P&Ls that came through that had 10 expenses on it, and that's all the expenses on the P&L. They have nothing else. And it's just like-Joseph:Wages.Jonathan:Yeah, wages. Like payroll taxes-Joseph:Supplies.Jonathan:[crosstalk 00:03:36] that. Insurance is on that. They have a consultant, probably, in wages. They probably did some recruitment, that was in wages. And it's just all in one big pile, one big line item. And you can't define anything out of that. So presentation is just as important as well. So what about you? What are some other things you like to look at on the P&L? Because I could probably talk about this for another two hours.Joseph:Yeah, no. I like to look at the owner's discretionary expenses and really make sure that you're able to do that. Anytime that you're ever going to buy or sell, it's in everyone's best interest to do what's called normalize the financial statements, which is what Jonathan just described there. Which is like all of this stuff that the owners run through that are ordinary necessary business expenses, if somebody else came and bought the practice out, a PE firm or a bigger company comes out, or DSO, whatever, comes in and buys, they're not going to spend $18,000 on the travel to take you to eight CEs across the country. Right? They're going to come up with probably a more cost-effective way to do that. So I like looking at the owner's discretionary expenses.Joseph:I like looking at labor, and seeing how much are we spending on labor? One of the calculations that we make for our clients each month is: what percentage of your money are you spending on clinical staff, hygiene staff, and clerical staff, divided by your top line revenue? And one of the things that we try to get inside the benchmark of the industry. And if they're significantly outside of that benchmark, like in a bad way, if we want that number to be, let's say, 25%, and that number's at 35%, then that tells us that that's something that we need to dig into.Joseph:Now, some people might just say immediately, "Oh, that just means we need to cut salaries and cut staff by 25%," but then if we just kind of look at the top line and we're like, "Well, the practice only collected like $20,000 this month," it sounds like it's probably more of a collections problem and a top line revenue problem than a production problem, and maybe an AR problem, versus spending too much in wages. So I like to look at that. I think that when you look at your people, and we've talked a lot about leadership inside this podcast, the people that are inside your practice that are helping you make this thing go certainly are a big, huge asset to you. They officially go on the P&L. But I want to make sure that we can it back and challenge the staff and say, "Hey, look, we need to grow the practice in order to justify the money that we're spending on all of the people that are here." That's something that I look at.Joseph:I like to look at supplies and labs and figure out if that's kind of something that's significantly out of whack. If you got $20,000 in collections but you're spending $25,000 a month in labs, anybody could tell you that's a problem. Right? So I look at supplies. Like to look at labs, like to look at wages. And then I'm just kind of looking for like any crazy stuff that sticks out, any kind of big pieces. Like going back to the comparative piece that we were talking about with the balance sheet, I like to look at a P&L and I like to look at this month versus the past three months or four months or five months, so I can see if I can note any trends. And then if all of a sudden I see an $8,000 expense that pops into an expense category, that may be something we need to look at. Like, "What's going on here?"Joseph:It's like, "Oh. Well, I had to replace the roof," or, "I had to replace the AC," or, "I had a piece of equipment that I bought," well, maybe that doesn't need to be on the P&L, maybe that needs to be on the balance sheet. Maybe we've got kind of a bigger problem here if we see huge, huge increases. And the technical term that we call it in the accounting world is that we're going to do an analytical review. We're going to analyze, we're going to look at what all has happened. So those are some of the things that I'm looking at when I'm looking at a P&L. I'm looking at wages as a percentage of revenue, like all the money that you're spending. So obviously that's going to include whatever your 401(k) matches, whatever your health insurance is you're paying on behalf, your payroll taxes. All of that goes into paying for your people.Joseph:I'm going to divide that by the top line revenue and see what that number looks like. And that's one of the reasons that it's important. You were mentioned in the 10 line income statements we've seen, that's why it's important that wages need to be separated out. It's like, "What do you mean you put your doctor's wages in with your doctor's family and with your hygiene staff, and that means that our wages are now 290 ... Well, of course they're out of whack. Right? Because we need to separate those things out to determine whether or not we're spending our money wisely on our staff."Jonathan:Yeah. Completely agree. I was having a conversation with someone on a podcast years ago, and they were like, "Well, taxes are your number one expense as a business owner." And that's a line that has been fed to so many people. I think probably even I heard that in tax class when I was taking a tax one and two in college, or whatever. But in dental practices, that's not the case. Taxes are not your ... Now, if you add up all the different types of taxes, they were talking about income taxes. That's the narrative we're usually give them around that. Your staff is your number one cost.Jonathan:It's your number one investment is a way I'd love to be able to rephrase that, and be able to ... the paradigm change of a practice, because if you're spending 25 cents out of every dollar that comes in the practice, up to 35 cents out of every dollar that comes into the practice, on your people, then your practice that nets, let's say, 40%. And if you're paying 40% in taxes on 40% of what's left over, you're only paying 16% in taxes, 16 cents per dollar, for your staff, for your income taxes. Whereas you're paying 25 to 35 cents per dollar for your staff. Big difference, right? So your people are your big difference. And that's a good thing. You want to pay people to do good work for you. I've definitely ran into CPAs or to clients that have had CPAs in the past that have said that, "Oh yeah, you're overpaying your people by this much money. And this is how you're going to get your payroll in line, is you're going to clean house and lower everyone's wages by this amount."Jonathan:And it just kind of makes me sick that ... that can wreck the practice if it's not done really, really well. I will say it is possible to have an overpaying problem, to pay people a whole lot more money. But to me, and we use this concept in our firm, I would rather overpay for good people and have my life be easier than have to worry about the $1,500 a year that I'd be saving if I was trying to not be competitive with my wages. This is a pretty bold statement, but I would think that, as a dental practice owner, you should be wanting to be the highest paying person in your area for doing a good job. Because you want the best people. You don't want the worst people. The best people can raise you up really, really high. And so staffing costs definitely look at. But from a percentage-base, from an analytical standpoint, yeah, we got to have some type of understanding of how to reign in these numbers on our staff, to be able to give some type of context on how we're doing, how well we are spending our money.Jonathan:And that's what we say we're answering the question of whenever we do an analysis of overhead every month for our clients is, it's literally the question that this information comes in. We have a four questions report, and one of the questions is, "How well did you spend your money?" And we have an overhead analysis that gives you percentages of these things. So definitely staff definitely supplies, definitely labs. But another thing that I really like to look at, after I've looked at profitability and I've looked at the balance sheet and everything like that, is I like to look at growth expenses. What are we reinvesting in? What is going to happen in this practice? And are we seeing growth off of those said expenses? We've got a lot of clients that have 0% of fees or their revenue goes to growth expenses.Jonathan:Nothing. They don't spend anything on advertising. They don't spend anything on consultants. They don't spend anything on big new courses or things that they were trying to learn, anything like that, but they're still growing. And then we have people that will spend 15 to 20% of every dollar that comes in on these things, and they're not growing at all. So effectiveness of growth expenses is a very important number that I like to look at just when I'm trying to say ... Because that's a very quick thing for me to be able to tell our clients, like, "Look, your growth expenses are really, really high, and we're not seeing any revenue growth. Is this an effective use of our spent? Of our money? Because I love that you're willing to invest in the growth of your practice, that's what you're supposed to do as a business owner, but is this the most effective use of that money?" And for-Joseph:[crosstalk 00:12:11].Jonathan:Exactly. So for dentists that can be a really big deal. That's a really, really, really big deal, is effective use of advertising spend, or growth spend, consulting or whatever it may be. And that's something that gets lost a lot whenever you analyze financial statements too much is, what is our ROI? I don't go into such fine detail of saying, "We need to know the cost per lead of everything that happens from every single campaign," or anything like that. I just hope that you've hired someone that's smart to do your advertising that does that for you. And then you can validate those things down the road. I don't think that you should be spending 30 man hours a week trying to figure out just how effective those lead funnels were or anything like that.Jonathan:So from the P&L, those are the big things. Obviously we back out interest, appreciation, amortization, and things like that when we do the normalization and seller's discretionary earnings. I don't put a whole lot of weight into looking at interest, depreciation, and amortization. I'm never going to look at an interest ratio or anything like that for a dental practice. I don't think it's really very fruitful of an endeavor. I might very briefly see like, "Oh, there's $30,000 on interest. This person has a lot of debt." But if I looked at the balance sheet I've already noticed that. So if I'm looking at, "Is this a well ... This is a good set of financials," if I see that $30,000 in interest and I see no debt on the balance sheet, then that makes me just roll my eyes and throw the things in the trash, because I know that it's probably not a good financial statement.Joseph:Not good financials. Yeah.Jonathan:Or interest is [inaudible 00:13:43]. What else have I seen? I've seen credit card fees be put to interest expense. I've seen ... there's just so many things you see get stuck in there. So anyway. Yeah, to me that's what the P&L's for, is show, number one, it has to be well put together just like the balance sheet, just like statement and cashflow, or else it's almost worthless. You're looking at revenue. And then also comparatives. Again, we look at ... Whereas the balance sheet is a snapshot of time, a P&L is a story over a period of time. So whenever you're looking at the stories you have to compare a period over a period to be able to tell that. So in terms of that, of how to use comparatives inside of P&Ls, how do you look at versus the past?Joseph:Yeah, so one of the things we were talking about with the balance sheet is getting a chance to look at some different ratios, right? So we talked about like the current ratio, current assets divided by current liabilities, and how we need to basically figure out a way to create a level playing field. So if your practice started out at $400,000 in collections, you add five more practices and now you're at $4 million in collections, right, that's not exactly the same to look at a top line revenue number. So one of the things that we do on income statements is we look at it as a percentage. So we look at what is the percentage of revenue that we're spending on all of these different things. So if we're just going to hop straight down to the bottom line, we take the net income divided by the top line. So if you made $100,000 in net profit, divide that by a million dollars in practice, your net income was 10%.Joseph:So as mentioned there, we're going to also make the adjustments that we need for the owner's discretionary expenses, probably going to back out depreciation, amortization, and interest. And we'll be able to get like a pretty clear picture as to how we're doing running a $4 million practice versus a $400,000 practice. Obviously the net income, the bottom line, is going to be different. But if you're making a 2% return on a $4 million practice, maybe you were ahead to not be a $4 million practice, and maybe you would be ahead to stay a $800,000 practice. Right? So we're constantly going to look at the percentages of those things. And as you're looking at those over time, you can compare what's the net income look like, what's the staffing look like as a percentage of income.Joseph:You mentioned the growth expenses, Jonathan. So as we grow and as we get established in this market, maybe it doesn't make as much sense to spend as much money on marketing once our, quote, name is out there. Or it may be one of those things we need to slow down the growth in the practice, so we're going to decrease that. So what do all those things look like as a percentage of revenue? So I think those are the things that I'm looking at in terms of kind of looking at things over time. What do those percentages look like, and how are we doing? And what's our net profit dollars look like? Our net percentage look like? And how do we advance it towards the goals that we have in mind, whatever those goals may be?Jonathan:Yep. And that's the reason we started the whole conversation with the financial statements is saying that they're a body of work, but they're not the end all be all that a lot of people think. There's probably some dentists that are listening now that think that we're almost being blasphemous by saying that financial statements don't answer every single question that has to do with the dental practice. And to the concepts that you're talking about, yeah, I mean the concept of diminishing returns versus scale is something that happens a lot in service-based businesses. Which diminishing returns, just a quick explanation of that, is as you grow larger, the effectiveness of things or the profitability of things does typically go down, unless you have really big economies of scale.Jonathan:There's a lot of people trying to craft a narrative about the DSO space, saying that, "Oh, we've got 20 offices and we get this economy of scale on our supplies. And we're going to make tons of money on that." And when you think about it, okay, let's say that you're going to actually save 10% on your supplies if you have economies of scale. Your supplies are going to be like 7% of your revenue. That means you're going to save 0.7% of your total revenue.Joseph:Seven tenths of 1%.Jonathan:Yeah. Are you trying to grow to 20 locations so you can save 0.7%? That's not the purpose of that, right? You want to get it so the whole number gets bigger. The other part about that is diminishing returns are a really easy concept for me to be able to ... or a really easy example of that is, when a business grows to a certain size ... The way I tell people to imagine it is, think of it as a capacity, think of it as like a circle. And your total capacity is that circle. And I've also taught people to think of it as like a glass, like that you fill with water. When you get to a certain size you may be overflowing with water, your circle is about to burst. And you've got to expand capacity in some way. And when you expand capacity, there's a very few ways you can do that. You can add time, which means that you open more hours. You can add people, or you can add space.Jonathan:And if you already have an effective use of people, but you have access to space, maybe space is the best way to do it. If your people are maxed out in what they're doing in a day, a lot of times what that usually looks like is you adding an associate. And the associate is a really good example of a diminishing return, because in order to have someone there that's a practicing dentist, you can see a dental practice's profitability go from 55% all the way down to like 30% almost overnight when they add an associate in because we're paying this associate so much money to be there comparatively to when they were there before. It's one of the reasons why it's super important to not be adding an associate before you're really ready for it. And there's a lot of different things around what being ready for it means. Like new patient flow, capacity, utilization. There's a lot of different things that go into when that's right for the different dentist.Jonathan:And cashflow too. And also, like you said, goals. What is it that you set out to do? And how does this help you address those goals? So the diminishing return concept in that is that there's a point in time where, if you're a full-time dentist that's very busy, say you have 2000 patients, if you've got like 100 new patients a month coming in, you've got 2000 patients already and you're maxed out and you've got two-and-a-half hygienists, and they're maxed out and booked out four weeks in advance, and you've got two assistants that you're already working out of two and a half chairs a day on, and you've got two front office people that are just stressed to the max, maybe the only thing you have left to do is add an associate. And once you do that, immediately after that you're not going to have 4,000 patients. A way that I tell people to conceptualize the capacity of a single dental practice owner, or single dentist, is somewhere between, it depends on the dentist, somewhere between 1500 and 2500 patients. Maybe up to 3000 patients.Jonathan:In order for you to have two dentists there, you have to have twice that number of patients. It's just simple, right? It has to be that way. And to get to that, once you've upgraded your glass, the bigger glass, you've got to have more water to fill it. In order to get more water to fill it, you've got to have a patient flow. And if you've got 100 new patients a month coming in, and you've got a new person coming in, it's going to take you, to get to 2000 more patients, at least 20 months to get that full capacity. Now you're also going to have attrition, so that's going to create a little bit more of a flow, a little bit longer time for you to be able to hit that point. But in that timeframe, between the time you add that associate to the end of that time, you're going to have a diminishing return. You're going to have an investment in that new person.Jonathan:You're going to be making less money usually. Because usually you have what's called the cannibalization of production, or that's a term that I call it. Because in order to feed that person that came in to work for you, you got to give them some of your production, and they usually don't produce as much as you used to produce. And then you're also paying them 30% of that. So there's a lot of [inaudible 00:21:21] that go into it. But in terms of the growth and scale, whenever we're looking at a P&L, if I look at a practice that has had an associate for only six months, and I looked at that practice a year before, it's going to look very different. So to the determination of the growth and things like that, it's really important you understand your path, what you're trying to accomplish with this practice.Jonathan:I talk to dentists every day, one person will be like, "I want to get to a point where I'm doing 1.5 million a year in revenue, no associates, nothing else going on. I work four days a week, and I'm killing it." And I have other people that said, "I want to own, be adding a new practice and a half every year for the next eight years." Everybody has their own path, and everyone's right at the same time. What's right for one person is not right for the other. But the P&Ls will say different things, because the P&L of that guy who's adding an office every year and a half, they're going to have a lot of growing pains. They're going to have a lot of cashflow issues, they're going to have a lot of profitability issues. They're going to have just a lot of issues because the missing component in that is time. And that time usually it leads back to the non quantitative numbers, or nonfinancial numbers, which are more practice management in nature.Jonathan:So those are really important pieces. Another thing that we talked about earlier that I wanted to talk about is the breakeven point. So when I'm looking at a P&L, a lot of the data that goes into your breakeven point comes from the P&L. There are things that come from the balance sheet as well, technically. Or the statement and cashflow technically. But the breakeven point is a really, really good number for you to be able to tell, as a business, like, "If I don't really have a whole lot going on, if I break my arm next month, how much is this business going to cost me to keep open?" Or, "What's the minimum amount of money I can produce in a month and actually start making money?" Or, "If I want to make, say, $30,000 a month, how much do I need to be bringing in collections?"Jonathan:Your breakeven point is a number that would be involved in each of those answers. I was always [inaudible 00:23:16] the people didn't calculate that internally. And then I have a math background, and so I was like, "I'll just calculate it out and be it." The thing is, it's an evolving number, right? Like it's a number that doesn't stay the same. It has variabilities inside of it. And as you grow it has even more volatility that goes along with that breakeven point. But in general, you can usually come up with a ... Over time it normalizes. Right? So we give that number to our clients every month. "Here's what your breakeven point is," so they can have the context of, "Well, I want to make $30,000. My breakeven point's $45,000. I've got to be producing 75 right now. My average is 55. I got a lot of work to do." They know they got to influence it.Jonathan:They're not going to be surprised when they don't have $30,000 at the end of the month. They're going to know what that is. So what about you in terms of breakeven point, things like that? What are some of the things that you like to use a breakeven point in order to be able to use in terms of management and goal setting and things like that?Jonathan:Hey everybody, Jonathan checking in here. Just so you know, this is a second part of the episode. So if you've not listened to the first part yet, you want to go back and listen to it in the prior weeks. We should have it labeled on the episode title what part one is and part two is. So you should be able to see that in the title of the episode [inaudible 00:24:33] what episode of episode it is. So thanks.Jonathan:That's it for today, guys. I hope you enjoyed this episode of the Tooth And Coin podcast. If you are going to be a practice owner or a new practice owner, and you're interested in CPA services, head on over to toothandcoin.com, where you can check out more about our CPA services. We help out around 250 offices around the country and would love to be able to have the discussion about how we could help your new practice. We do specialize in new practice owners, so people that are about to be an owner of a practice they're acquiring, about to be an owner of a practice they are starting up, or has become an owner in the past five years. That is our specialty. We'd love to be able to talk to you about how we could help you in your services with your tax and accounting services.Jonathan:And if you enjoyed today's episode, again, go to the Facebook group, talk to us about what we've talked about, join in on the discussion, and let's create an environment where we can talk about some of these things so that we can all help each other get through these things together so that this adventure of business ownership is more fun, more productive, and better in the long term.Jonathan:Lastly, if you want access to those resources that we are currently building, just text the word toothandcoin to 33444. That's tooth and coin, no spaces, T-O-O-T-H-A-N-D-C-O-I-N to 33444. Apply with your email address. We'll send you the instructions in the Facebook group. We'll send you the resources when they're available, and we will see you next week.

Join the discussion on Facebook!Full Transcript:Jonathan:Welcome to the Tooth and Coin podcast where we talk about your adventure of being a dental practice owner. In these episodes we're going to be talking about problems that you will likely face as a practice owner, as well as give an idea about actionable solutions that you can take so you can get past this problem in your practice. Some of these concepts are really big ones, some of them are very specific but we hope that these episodes help you along with your journey.Jonathan:Now a very important piece for you to understand is that this is not paid financial advise. This is not paid task or legal advice. We are not your financial advisors, we are not your CPA's, this is two CPA's talking about informational and educational content to help you along with your journey. It's a very important piece for you to understand. Another thing that you need to know is that if you enjoyed today's content, join us on the Facebook group. We've got a Facebook group that is active with dentists that is going to have content talking about what we're talking about today to continue the discussion. Agree with us, don't agree with us, have a story to tell, have something to share, join us on the Facebook group. If you go to Facebook and you search for Tooth and Coin podcast, click on it to join it and be able to join us there.Jonathan:Finally, if you need some more help, we're developing a list of resources that are going to be centering around our topics of discussion to be able to help you a little bit more than what the content is doing. If you'd like access to that whenever it becomes ready, all you have to do is text the word Tooth and Coin, T-O-O-T-H-A-N-D-C-O-I-N to 33444. Again, that's Tooth and Coin, all one word, no spaces to 33444, reply with your email address and we'll email you instructions on how to get into the Facebook group as well as add you to the list to be able to send you those resources when they're available. If they're available, we'll go ahead and send them to you as well.Jonathan:Onto today's episode, hope you enjoy it. Hey there ambitious dentists, today on the Tooth and Coin podcast we're going to be talking about the number one most exciting thing in dentistry which is fraud. Everyone's afraid of it, everyone hates it, everyone hears this happening and thinks that it may happen to them. I've seen numbers from really smart people say that something like one out of every three, to one out of every two dentists will at some point in their career, be embezzled upon. It's a staggeringly high number of dentists may actually be effected by this in their practice. I get a lot of questions and a lot of confusion about, "Why does this happen? How does it happen? Is a CPA firm going to help me with this problem in my life?" And things like that.Jonathan:The answer is not... it's a nuanced answer like so many things are, it's not a one size fits all. Today's discussion we're going to be talking about the problem that is embezzlement in dental practices and I've already kind of highlighted what the problem is, people they can steal your money. To highlight that problem I'm going to be asking Joseph, Joseph has actually lectured on this topic before and then we're going to turn the tables around and Joseph's going to talk to me about in terms of the CPA firm helps with this problem inside of our clients and what our perspective is and how we view our service for our clients when it comes to this really nasty thing inside of not just dental practices, but all small businesses.Jonathan:Again, the main problem is that a lot of people are going to be embezzled upon, dental practices for some reason tend to be targeted a lot for embezzlement. Joseph, why don't you tell us why does fraud occur in small business, especially to dentists.Joseph:That number that you just spit out, that's nuts. I don't know that I've heard that. Somewhere between 30 to 50% of dentists get embezzled upon during their career. I guess if you look at the average dentist, we're talking about 30 plus years, we're talking most of them are going to own their own shop or at least the ones that are listening to our podcast are going to own their own shop at some point. I guess when you put it out that long, I guess that increases the odds. The Small Business Administration talks about the percentage of businesses that fail. Maybe dentists are so high because they're such a great business to be in and they've got such longevity with them, I don't know.Joseph:Man, that's a crazy stat for sure.Jonathan:It really is. I think the reason that is is because there's a lot of different forms of embezzlement, there's literally someone stealing tons and tons of money, and then there's people that are stealing supplies. Embezzlement has... or stealing hours even, just putting too many hours down compared to what they worked for. You may be one of those 50% but it may be that somebody padded hours for three months before you fired them. It doesn't necessarily mean that you're getting hundreds and hundreds of thousands of dollars stolen.Jonathan:Yeah, it's a big number and something you've got to be aware of. You've got to be on top of.Joseph:That'll wake you up in the morning. If you're listening to our podcast bright early in the morning, that should wake you up and get your attention.Jonathan:Oh yeah.Joseph:Jonathon, as CPA's we are specifically trained to think a certain way and you may think that this is right, you may think that this is wrong, but one of the things that they've just kind of ingrained in our brain is that everyone's going to steal from you given the right set of circumstances. That's kind of the way we're trained to think is, "How do we think about it in terms of those specific pieces?" Kind of the tried and true piece that we always point to in the CPA world is what's referred to as the fraud triangle. Do you remember the fraud triangle? Have you talked about the fraud triangle since you took the CPA exam?Joseph:Did you wake up in the morning, you're like, "Hey April, what's going on babe? Let's talk about the fraud triangle."Jonathan:The triangle that I usually refer to is the cheat, fast and quality, is that triangle. I don't usually talk about this triangle, the fraud triangle. Talk to me about the fraud triangle.Joseph:There's three sides to the fraud triangle, right? That's why we use a triangle, three sides. We've got three different pieces to fraud. The first part of the fraud triangle, and it doesn't really go in any specific order, but one of them is incentive. "Do I have an incentive to commit fraud?" I'm going to use your example. If I go and I pad my hours, in other words if I go out and I say, "I didn't work eight hours today, I worked eight and a half," but I actually only worked like seven in a half. That's padding my hours and I'm going to have a direct incentive from that.Joseph:Kind of the higher levels of financial management there is the incentive that if our PNL numbers look better, I'm going to get a higher bonus. If my overhead percentage stays under a point, then I'm going to get some sort of financial incentive. Incentive's the first piece of the fraud triangle, anything else that you might think of in the dental world that would be part of an incentive for fraud? Do we have any... I would imagine some of them. Go ahead.Jonathan:Yeah, there are tons of incentives for fraud in this world. There's tons of incentives for people to... really the main incentive that people have inside the dental world is usually just money. That's the incentive for people to try and take it. They want more money. Whether it's money that they deserve or not, that's what they are typically wanting.Joseph:Got it. Maybe you have a new patient bonus to where if you have X amount of new patients that are out there, and if you get those new patients numbers, that may be the incentive that somebody goes and then creates a new patient inside of the software, or something silly like that. Incentives the first piece of the fraud triangle.Joseph:The second piece of the fraud triangle is opportunity. Opportunity is probably the one that is easiest to understand so if I am working the front desk and somebody pays in cash and they give me $80 worth of cash. I have the opportunity to stick that cash right inside my pocket. I was just looking at some financials for one of our clients that has multiple employees that have the corporate credit card. If you're walking around with the corporate credit card in your wallet as an employee or team member of a dental practice, then you are presented every single day with the opportunity to whip that card out at wherever you want to and do that. Opportunity's the second piece.Joseph:The third piece that is I think the more psychological piece that's out there, is what's called rational. The rational basically is a way for our mind to justify that what I'm doing is okay. It may go something like this, "Well Mr and Mrs dentist is just doing so well, they're making all this money. I see all of these deposits come through. They pay me a pittance, I'm making minimum wage or not nearly enough." I've just rationalized in my head that it's okay to take money, to pad hours, to swipe the corporate credit card, to take any form of all these different pieces that are out there.Joseph:That's the three pieces of the fraud triangle that we were trained upon way back when inside of CPA land. Opportunity, incentive and then rational. What one kind of sticks out for you Jonathon?Jonathan:It's almost always opportunity to me is what it seems like to me in terms of why this happens. When it happens in this industry, I guess is a better way for me to say it. Usually it seems to be opportunity. Someone perceives a weakness in, this is CPA talk, internal controls which for everyone that's listening, internal controls are effectively like, "Hey, nobody's looking over my shoulder when I'm doing this, and I can just take that money if I want to. If you've ever seen Office Space, it's whenever they do the thing, they have this computer program that rounds it to the next penny and they're like, "No ones looking at this. All we have to do is round this fraction of a penny up and then put it into a different bank account and literally no one will ever figure it out because it's literally we're talking about hundreds of thousands of transactions. We're talking about a hundredth of a penny per transaction. That transaction will never be looked at or flagged so that money will just be in this bank account."Jonathan:It's opportunity is what typically happens in dental practices, is they think that, "Hey, I'm the only one who writes the checks. I'm the one who receives the inventory. I'm the one who pays the bill. I'm the one who signs the check. I'm the one who receives the patients money. I'm the one who enters it into the practice management software. I'm the one who takes it to the bank." There's no one really looking over their shoulder. Opportunity, usually to me I think is the first path towards... into the dental space of it, is they realize, "Hey, there's a little bit of an opportunity there."Jonathan:I'm fully, fully, fully, fully not going to downplay the fact that there's some type of motivation typically that makes them look for those types of things, but in dental practices, those opportunities seem to arise a lot. I think that's just due to the nature of it being in a smaller business. In your time as a CFO, did you ever have any moments there was the opportunity for fraud at your old place that you could... obviously if it's something that you're not allowed to talk about, don't talk about it but is there anything that you can think of that you've ran into in your career when it comes to fraud?Joseph:I think there are certainly things that as a CFO controller, as a business owner, there are certain steps that you take to try to prevent fraud. One of the things that you were just mentioning there was the same person that's opening the mail is making the deposits and entering stuff into the patient management software. One of the things that we talk about is an accounting term is segregation of duties. You don't want to have the same person that's doing all of those things.Joseph:One of the things that we had to always make sure was that every time a patient came in the door, it was a documented patient encounter that went into the patient management software. What that's going to do is that's going to generate the opportunity to create the coding for that specific encounter. What was the procedure that was done? What was the product that was delivered? Once that whole thing starts, then that really is a good catch about a bunch of different things.Joseph:If somebody came in for a pair of compression hose that were $80, that gets entered into the patient management software, that's then going to give them... they're going to have to pay the $80 because it wasn't covered by insurance. When you think about it in terms of that it's like, okay, if this $80 invoice gets generated, if the patient pays cash and the person that's taking the payment, the front desk person or the clinician or whoever it is, takes that $80 and puts it in their pocket rather than in the company deposit, what's going to happen is because it's in the patient management software, an invoice is going to get generated. Then the patient is going to go ahead and get a bill the next month. If you got a bill for something you already paid for Jonathon, what would be your first thought and what would you do next?Jonathan:If I got a bill for something I already paid for I'd say, "Hey, they've not processed your payment, we need to call the vendor and see what's going on."Joseph:Yeah. Not that that happened regularly, but that was just one specific piece that we had in place. I think the other stuff, I think that probably every CFO's big nightmare or controllers big nightmare is these company credit cards that are out there. Credit card companies make it really, really easy for you once you have a business credit card to order additional card holders and additional probably. I was always real hesitant to have somebody get added to the company credit card because it just creates this opportunity and if you take the opportunity and you take the rational, it may be one of those things where somebody's got the corporate credit card and it's time for them to go out to the lake and go fishing this weekend, and they just whip the company credit card out and fill their bass boat up with fuel on the company.Joseph:That's going to look like a charge to Exxon or Shell or Conoco, whoever it is, it's not going to be one of those things. Obviously if you've got somebody that's looking at all that stuff, they say, "Well typically the gas charge is $25, and all the sudden here's an $85 charge on Friday afternoon to Conoco," that may raise a red flag. I think that kind of goes back into the other piece of it is that if you do have a company credit card and you do have people that have those, you need to be reviewing those charges every single month. I don't want you to get carried away and review it daily and think that everybody's stealing from you but you definitely need to give it the old eyeball test.Joseph:Jonathon, I don't know if you're familiar with the formal term of eyeball test, but I was talking to a client about this the other day, I was like, "Man, you need to give it the eyeball test." He's like, "What's that?" I said, "Well, you just kind of take a look at it and see if things look out of whack." What I just mentioned is if typically your gas is $25, $30, $32 and then you have an $85 charge, that doesn't pass the eyeball test. That's something that you need to look into.Joseph:The other thing is that you've got... the IRS requires that you have documentation for every single thing that you're claiming as a business expense. If you've got these credit cards that are out running around, you've got to have some sort of system to collect the receipts and to document that and to say why it was an ordinary necessary business expense. If it comes under scrutiny, that's what the IRS is going to say. I was told by an IRS agent that whenever they presented proof that this was an ordinary necessary business expense, they pulled out the credit card statement and said, "Well, see right here it says Exxon Mobil $24," and they said, "A charge on a credit card statement is not enough documentation to prove that it's an ordinary necessary business expense.Joseph:Those are a couple of things that jump out. Having multiple people having dual controls and segregation of duties, those are big things. Making sure that every patient encounter is entered into your patient management software. One thing I was talking to a client about the other day was one of the things, if I'm sitting back in my CPA brain and I'm trying to invent ways to create fraud, is to review your adjustments report. Let's say, go back to this $80 compression hose, let's say that that patient comes in and they pay $80 and the person that's working the front gets really, really smart and they say, "Oh, we'll just put a patient credit adjust for $80," which means that that patient won't receive a bill and it'll show up as they had actually paid but the cash didn't make it to the company bank account.Joseph:That's something else that's out there. You need to be reviewing your adjustment reports. What would you think on adjustment reports? Is that something that we recommend that they do daily or weekly or monthly? What are your thoughts on those adjustment reports? We made our software so easy to just write balances off, I think somebody with some authority needs to be looking at those. What are your thoughts on that?Jonathan:There's a few. I don't know if it would be called an adjustment in whatever practice management software our clients are using, whether it be [inaudible 00:17:55] or [inaudible 00:17:56] dental, or soften, or whatever it is that they use. They all have the ability to do those types of things. One of the big dangers that a lot of these practice management softwares have 10 ways to do the same thing and really only one of them may be the right way. It will work on the surface but if you were to dig back the reason for doing it in a certain way, usually there's a reason you do it one of those 10 ways for whatever it was you were doing, and a lot of practices use practice management software incorrectly.Jonathan:One of the reasons we typically recommend having an office manager consultant person be able to come in and teach you how to do those the right way so that you are making sure everything goes in their correctly. In terms of the adjustment piece, yeah absolutely. One of the things that I tell people in regards to one of the best ways they can help prevent fraud, is to have a very solid end of day process in their practice. What I tell them is when I was in high school and college, I worked for what doesn't exist anymore, but a video rental store...[crosstalk 00:19:05]Joseph:You're dating yourself there.Jonathan:At the end of every night we had a countdown... yeah. At the end of every night we had to count down the registers which meant that you open the register, you printed out a report from the little software that was done in MS-DOS or some type of shell station. You print out this report, it comes out in that really big wide paper, it said, "This register had this much in cash. This much in checks, and these much in credit card payments go through this register." We had four registers and you had to countdown each register and make sure that every dollar was accounted for that went through that system.Jonathan:Then you had to, if it was cash you had to tie it up or put a rubber band around the cash and you had to put the checks, you had to have a ten key register printed out of that. You had all the credit card receipts, it's done together as well and you had to have it attached to that piece of paper that got printed out from that report and it had to go into the managers box every night.Jonathan:That was the first time I ever encountered something like this where you'd have two managers and they'd enter in an adjustment in a different way. Eventually one of those managers got in trouble because they weren't doing it the way that it needed to be done in order for the register at the end of the night to be accurately counting everything whenever it did the month end. It was one of those things where it worked for the day, but eventually it messed something up in the calculations down the road that that person didn't see until the manager was trying to do the month end closes and things like that.Jonathan:I tell people, one of the best things you can have in your small practice, because let's face it, a lot of people can't do segregation of duties. There's two people working in the front office and one of those might be the dentist in some of our practices. There's not much that they can do so what they do is it all gets housed under one persons hat. End of day process is really important and one of the things we tell the dentist they need to do everyday, or that we've heard from practice management consultants that are office people, have said that, "Have the dentist look at their day report everyday. Their day sheet and look at literally everything that came through the practice just to make sure that it makes sense."Jonathan:One of the things they said is to make sure that there's no adjustments to any patient accounts. There shouldn't be adjustments or deletions from patient accounts because if they're doing that then they've likely done something incorrectly. The way that it was explained to me, and again it depends on how your practice management softwares set up or whatever it is, is that there should be credits to accounts or there should be charges to accounts and then there should be write offs to accounts. There really shouldn't be adjustments to services after they've already been done unless there's a very valid reason. For example, "We accidentally billed this person for porcelain crown when it was a gold crown, so we had to take the porcelain crown off and add the gold crown charge in."Jonathan:There has to be a very specific reason, there should be an indication by each of those things done in that day sheet that you get that is a part of this. This is one of the things I also heard that you do whenever you're in a larger practice as well, if you're an associate for a larger practice you should be looking at your day sheet to make sure that you got credit for everything that you did that day. You didn't get put to the wrong provider, or you didn't... if you did something it actually got put onto the fee schedule so you actually got paid for it, so that the charge went to the patient account.Jonathan:That's something that I was told needs to be done on a daily basis as a part of that day end close process. That's one thing is the day sheet. The other thing is from the end of the day close, you should have what I mentioned for the video store rental place, you should have something from the practice management software saying, "We had this much in cash come in today, we had this much in checks come in today, we had this much in credit cards come in today." That should be tied together and there should be source documents there. There should be things showing you that those numbers are actually what happened.Jonathan:It gets a little bit complex in dental because you have all these insurance payments come in through electronic transactions. We get a letter in saying, "Hey, we're going to deposit this money into your account on the 24th of the month," and then it does get deposited on the 24th but it doesn't hit your bank account until the 25th. It's kind of hard to see how that happens because you enter it, you get that letter in a week in advance so the person in the front might be entering that notice into the system the week of when they get the letter, rather than the day it went into the account or even the day that it registered in the account.Jonathan:There's some complexities that can happen right there. Another really, really good reason to have a really good office manager type consultant, a person that we recommend a lot is Sandy Pardue, she's out of Louisiana. She's really, really great. There's also other programs out there that can help you with this if you're not familiar with how to do this. There are people that can help with this type of process and get this really set up strong for your office. Really important to have that. Really important to have that. That is not something that our office does. We are not practice management consultants.Jonathan:If you tell us what is happening in terms of the flow of the accounting dollars and cents that are coming into your office everyday, we can give you just a general understanding if we think that that's... where your areas of risk might be but that's really more of an informal feedback discussion between us than being a part of the service that we get paid for from our role as a CPA.Joseph:Interestingly enough, I'm sure that you get this all the time on sales calls but CPA's, we generally don't catch fraud. It's not something that's really a part of what it is that we do. I think the number one way that fraud is caught is by accident and not by something else. What are your thoughts Jonathon? As you get a chance to explain to clients what our role as CPA's is and fraud, what's a message that you're telling them as you kind of get that question, "Oh you guys are going to audit my books and catch fraud, right?" What's your message and what's your thoughts on the CPA's role in fraud?Jonathan:It's a really common misconception and I know that there are people out there that probably propagate that misconception in terms of CPA's that will say, "Oh yeah, we're going to catch that." The AICPA, the American Institute of Certified Public Accountants which for the dentists listening, that is like the American Dental Association for you guys. AICPA is the ADA for CPA's basically. The AICPA is very, very specific in how we as CPA's are to view ourselves in terms of audit, or in terms of fraud. That is basically to say that we're not here to catch fraud, that's not really our job. There are people that are CPA's that try to catch fraud, or to even be slightly more specific, they help track down how fraud was occurred after it's been discovered. Those are called forensic accountants.Jonathan:In general, fraudulent activity, there are very few services that CPA's offer that are actually designed to catch fraud. The most in depth service that CPA's offer small business, it's called an audit. There's actually a prescribed engagement called an audit under the AICPA guidelines and that audit even in that, it states in the engagement letter, or in the opinion letter that our services, even if we're doing an audit which is the most in depth thing, they're going to go top to bottom on your internal controls, and your processes and things like that. That audit will even say, "This is not meant to catch fraud." It's really just more to view how strong your internal controls are that could potentially lead to fraud.Jonathan:If they're very weak or if they're very strong, and as well as to give you an overall understanding of how your business operations are running from a business standpoint. That's the purpose of an audit. Even in the most in depth engagement, under the AICPA guidelines, it's still not designed to catch fraud. A CPA that's engaged with you to help with your tax compliance, tax planning, tax rejections, accounting services, management reports, things like that, those services are far, far, far, far less in depth than an audit would be. They are definitely not designed to catch fraud as well.Jonathan:The way that I tell people is that, "Has our firm caught fraud before? Yes, we have." We've seen credit card payments go into vendors that didn't exist. Someone had not in the office, gotten credit card information, was paying for stuff. We've seen... you and I were talking about this before, we had a client just this last weekend had a check that was written from their... this office was in California and the check was cashed in Florida with a different check number, different everything, it just happened to have their routing and account number on it. It's a $20,000 check that got cashed all the way across the country, it was just somebody had fraudulently found their information and put it down and made a fake check, and cashed this check for $20,000.Jonathan:That would be an example of something that our services are not designed to catch a fraud. One of the things that we do, is we ask our clients if we see a transaction that we don't know who the vendor is or who the payee is say, "Hey, what is this $20,000 for?" That would be an example of something that we would... I can't say that we would catch that as being fraud because what could have happened is we could ask the client, "Hey, who is Shelly Franklin and why did you write her a $20,000 check?" If for whatever reason the client had a mental lapse and just never replied to the email or said, "That was for equipment," maybe they paid Henry Shrine $20,000 and they just didn't connect the dots of being two different vendor names, then we would never know. That wouldn't change.Jonathan:That's a big example. $20,000 is a big number amount. What if it had been a $50 check? What if it had been an $80 check or something, a much smaller amount? The way our service is designed, if we don't know who the vendor is and there's no memo, there's nothing in the memo saying what it was for, then even on a smaller item like that we would ask the client who the vendor was and what the purpose was, but I know there's a lot of CPA firms out there that would just be like, "We'll just put that to contract labor. We'll put it to patient refunds," or something like that and just be done with it.Jonathan:Ours is specifically designed to ask that question the way that we do our stuff, but it's not designed to catch fraud, it's designed for us to ask questions about things that we aren't aware of. None of our services are designed to catch fraud, but it doesn't hurt to have somebody that is really familiar with the dental industry to know who the vendors are, to know, "Hey, Align Technology is a lab and A-L-I-G-N-E is not that same company." We need to make sure if a check gets written to A-L-I-G-N-E that we're going to ask, "Who is this person? Who is this vendor?" So you have that second set of eyes just kind of looking over those types of things.Jonathan:We do help. I interviewed multiple years back, and I've had dinner with him, really nice guy David Harris, he owns a company called Prosperident, it's the number one company in probably the world in finding embezzlement inside of dental practices. They help catch hundreds of people a year that have embezzled in dental practices, they're really, really good. He's a CPA, he's a CFE, he's all these things. He has way more letters behind his name then I'd ever care to have. I asked him I was like, "Hey, how can..." this was whenever we were starting the company I was like, "How can we help with this process of combating embezzlement in our practices?"Jonathan:He said, "Jonathon, we help out hundreds of practices a year catch embezzlement or to put these people behind bars if we can, or make them pay. Maybe one percent of the people that we find, the CPA ever even caught a sniffle of what they were doing." He said, "It's just because the services are not designed that way." It's a big misconception out there guys, but I want you to be certain to understand that just because you have a dental CPA does not mean you're fraud proof or you are embezzlement proof. It could mean that you have a little bit of help in someone else kind of keeping an eye on things for you, but at the end of the day, like Joseph had illustrated saying, "Hey, they used the company credit card for gas in the boat rather than gas in the car," if we asked the employee, "Usually it's a $30 gas charge, this time it was a $60 gas charge." And they say, "It was because I usually fill up when I'm at a half tank and this time I filled up... gas was expensive this week." Or, "Yeah, I ended up buying some stuff in the store," or something like that.Jonathan:We're not going to be able to tell if they're lying or not. We weren't' there. We're not going to go and put a dipstick into their gas tank and make sure that they're telling the truth about how much gas they got. You wouldn't want us to do that type of thing either because it would take us so much time you'd be paying us so much money to do that type of work that it would be a negative value consequence to you. It'd be a negative return on your dollars for doing that.Jonathan:To kind of recap that, we try to keep the episodes to 30 minutes length, the problem is a lot of dentists will get embezzlement done in some way. It occurs because of the triangle of fraud which was opportunity... tell me what they were. Opportunity...Joseph:Opportunity's one, incentive is one, like I'm incentivized to create fraudulent transactions, and then rational. "Poor little old me, I don't make enough money. I'm trying to feed my babies, I've got whatever reason, I'm trying to feed my cats. I don't have enough money because this penny pinching dentist doesn't pay me enough money." So the rational. Opportunity, incentive, and rational. The fraud triangle.Jonathan:Yeah, exactly. Those are the things you have to be watching out for. Your CPA can be helpful in this but they're not designed to be the person protecting you bar none from embezzlement. The only person who's going to be able to do that at the end of the day is going to be your internal controls in your practice, and yourself as the business owner. You're going to have to keep an open eye on what's happening. I don't want anybody out there to all the sudden start thinking that the girl in the front is this international person of mystery that's a spy that's going to be stealing all of your money. The way that you have to go about this is you need to have a lot of trust in the people that you hire, or else you hopefully wouldn't have hired them in the first place. You've got to have verification. You've got to have some tests that you'll put into place over time. Make sure that you have a super solid office set up to where you have a solid close. Make sure that you have a way that you're processing your payments to your vendors in a smart way.Jonathan:Don't give the person who's writing the checks a stamp to write your checks with. Don't...[crosstalk 00:34:58]Joseph:Signature stamps.Jonathan:Yeah. Exactly.Joseph:No, don't do that.Jonathan:Don't do that. Make sure that the person who's receiving the inventory is tying those inventories to... or having whatever's coming in also be verified so that you're getting what you're supposed to be getting, you're getting what you paid for. Make sure that your day sheets don't have too many adjustments on them. If they do have adjustments make sure they're totally verified. Make sure that you have a solid deposit set up going. There's a lot of things that you've got to have, make sure they're solid and strong and then the most important thing probably I would say to do at the end of all that is to randomly test those systems.Jonathan:Test them once a quarter will probably be fine, just pick five transactions to randomly test once a quarter, and you will probably be fine. Then outside of that look for weird behaviors from your employees. One of the more common ones that people talk about is there's that office manager that just they do everything, without them the system would fall over. Even the dentist doesn't know what she does. She's always the first one there and she's always the last one to leave, she never takes a vacation. If she does, she's really, really anxious about who's doing what in the office. That's kind of the tell tale sign of someone who has opportunity because they're the only person who knows what's going on. Doesn't mean that they're going to do it, but that is kind of the tell tale sign.Jonathan:Also, look at spending patterns, if you're paying your office manager $40, 50, 60,000 a year, and they always have a new vehicle and maybe they don't have a spouse or something like that, keep your eyes open on that. And keep an eye on your numbers, make sure that your ratios make sense. If they don't sometimes that can lead to it. This has been the episode on fraud, opportunities, how the CPA helps you and the misconceptions surrounding that, and a whole lot of information in the 36 minutes.Jonathan:Joseph, is there anything else that you wanted to state in terms of this topic?Joseph:Don't let your deposits have cash back on them. That's another one. That's a pretty simple step that you can take at the bank, that's one of the things I tell brand new practice owners. If you're not going to be the one taking the deposit to the bank, don't allow it to have cash back. "Oh, $10,000 deposits worth of checks and I get $8,000 back in cash." That's one thing I meant to mention earlier that I didn't. No cash back on deposits, set your accounts up that way.Jonathan:That's a good one. Yeah, that's a good one. Just as a quick story time in this one, I had an attorney call me and he was like, "Hey, we have a client that..." their controller was writing hot checks or something like that, the person that was inside of the business and they were doing something similar to that. They were like, "The CPA didn't catch it. The business owner took them 12 months to figure it out and the person who was doing it was sending the money overseas." The person ended up leaving the country before they realized what had happened.Jonathan:That's a really good example of after doing all the recording and stuff, there's also that step of getting it to the bank. That's definitely a real thing. Anyway, all right guys, we will see you next time on the Tooth and Coin podcast. This has been one about fraud, if you have any stories about fraud or any types of interesting situations that have happened with that, make sure to share it inside of the Facebook group and to share it with the community. We'd love to be able to hear more about it. We will see you guys next time.Joseph:Bye guys.Jonathan:That's it for today guys, I hope you enjoyed this episode of the Tooth and Coin podcast. If you are going to be a practice owner or a new practice owner and you're interested in CPA services, head on over to toothandcoin.com where you can check out more about our CPA services. We help out around 250 offices around the country and we'd love to be able to have the discussion about how we can help your new practice. We do specialize in new practice owners, so people who are about to be an owner of a practice they're acquiring, about to be an owner of a practice they are starting up, or has become an owner in the past five years. That is our specialty.Jonathan:I would love to be able to talk to you about how we could help you in your services with your tax and accounting services. And if you enjoyed today's episode, again go to the Facebook group. Talk to us about what we've talked about, join in on the discussion, and let's create an environment where we can talk about some of these things so we can all help each other get through these things together so that this adventure of business ownership is more fun, more productive, and better in the long term.Jonathan:Lastly, if you want access to those resources that we are currently building, just text the word toothandcoin to 33444. That's toothandcoin, no spaces. T-O-O-T-H-A-N-D-C-O-I-N to 33444, reply with your email address, we'll send you instructions to the Facebook group, we'll send you the resources when they're available, and we will see you next week. 

Join the discussion on Facebook!Full Transcript:Jonathan:Welcome to the Tooth & Coin podcast, where we talk about your adventure of being a dental practice owner. In these episodes, we're going to be talking about problems that you will likely face as a practice owner, as well as give an idea about actionable solutions that you can take so that you can get past this problem in your practice. Some of these concepts are really big ones. Some of them are very specific, but we hope that these episodes help you along with your journey.Jonathan:Now, a very important piece for you to understand is that this is not paid financial advice. This is not paid task or legal advice. We are not your financial advisors. We are not your CPAs. This is two CPAs talking about informational and educational content to help you along with your journey. It's a very important piece for you to understand.Jonathan:Another thing that you need to know is if you enjoy today's content, join us on the Facebook group. So we've got a Facebook group that is active with dentists that is going to have content talking about what we're talking about today, to continue the discussion. Agree with us, don't agree with us, have a story to tell, have something to share. Join us in the Facebook group. If you go to Facebook and you search for Tooth & Coin podcast, click on it to join it and be able to join us there.Jonathan:Finally, if you need some more help, we're developing a list of resources that are going to be centering it around our topics of discussion, to be able to help you a little bit more than what the content is doing. So if you'd like access to that, whenever it becomes ready, all you have to do is text the word toothandcoin T-O-O-T-H-A-N-D-C-O-I-N to 33444.Jonathan:Again, that's toothandcoin, all one word, no spaces, to 33444. Reply with your email address and we'll email you instructions on how to get into a Facebook group, as well as add you to a list to be able to send you those resources when they're available and if they're available, we'll go ahead and send them to you as well. So onto today's episode. I hope you enjoy it.Jonathan:Hello, ambitious dentist. So today we are talking about the CFO role in dental practices. One of the things that I talk to about, a lot of dentists about throughout all of my conversations is what a CFO is, what they do, how they are aligned with your business. Do you even need one? I'll be honest with you. There's a lot of confusion in the dental industry around the function of a CFO, what CFOs do and is your CPA your CFO? Is that who it is?Jonathan:There's a lot of misconceptions about it and Joseph and I are going to talk about that today. So if you didn't listen to the first episode, this is episode number two. On the first episode, we outlined a bit about what the podcast is going to be about. In this episode, we're going to talk a little bit more about that CFO role and what it is, how it works and things like that.Jonathan:Joseph was actually the CFO of a medical company that was in the services space and had a lot of success. Seeing that business go from around $3 million a year in revenue upwards to almost eight figures in revenue. So he's got a lot of insight to this and I'm going to be asking him and interviewing him on this topic. So Joseph, why don't we start with that. Let's start with what is a CFO and what do they do?Joseph:Great question. Thanks. So when we think about different roles inside of the organization, I think most people are familiar with a CEO and could probably even tell you what a CEO is, a chief executive officer, and you may have heard terms thrown around like C-suite. When we talk about C-suite, what we're talking about is all of the team leads that have C at the beginning of their name.Joseph:So you may have a CEO, you may have a CMO, a chief marketing officer. You may have a chief operations officer or COO, you may have a chief compliance officer. So the CFO is the chief financial officer of an organization. So I think that's first and foremost, as you look at the traditional C-suite has three seats, a CEO, chief executive officer. Basically the one that is spearheading everything, the CEO has the vision. They typically are the owner of the practice, owner of the deal.Joseph:You're going to have a chief operations officer. So somebody that makes sure that the operations of the company are out there and then you've got the chief financial officer who are making sure that all of the money works. That's as simple as I can break it down. What are your thoughts when you think about what a CFO is, Jonathan?Jonathan:Same. The financial side, the F in there which obviously stands for financial, not the other F, it is there to talk about money. It's talking about the numbers. Talking about the ways in which that business has measures and manages its money in terms of the way it's coming in and the terms of the way it's going out. Definitely that's what most people think about when they think about CFOs. What I find in small businesses though, is that there's not always room for a CFO. So the owner usually takes on in smaller businesses.Joseph:I think first and foremost, you got to have cash to run a business. You can't pay payroll on an IOU. So at some form or fashion, you've got to have somebody that is managing cash. So that is cash that comes in the business. That's cash that comes out of the business, that comes in and goes out lots of different ways. It may come in through a line of credit, a beginning working capital draw.Joseph:It may come in through patient sales and collections. It may come in through credit card transactions, and then it's going to go out by writing checks, paying credit card bills, paying employees, all of those different things. So first and foremost, a typical owner of a small practice is going to be the one that's making sure that the cash comes in and the cash goes out. At the basic, most simplistic level, that's the first role that people are doing.Jonathan:I agree. Usually the person who is the owner or ends up being the dentist, they basically have to be all three of those things. They've got to be the CEO, they've got to be the COO and they've got to be the CFO. In that CFO role, they've got to make sure that the money going in and out is going to the right places and that there is something to manage and there's things happening.Jonathan:So it's this unique problem that is in the dental industry, that you have to be all of these things in this organization. Now, pretty much every small business has that problem. Obviously I'm the CEO, CFO, COO of Tooth & Coin but I have other people that help me with those things, but I haven't always had those people because we haven't always been as big as we've had.Jonathan:So we've had to grow people into those positions as our company has grown and evolved and things like that, but in terms of that small dental practice owner, you mentioned you got to have cash and you got to move those things in and out. What is it that you see in the dental space, being the dentist are doing, maybe even unknowingly as CFOs? What is it that they're probably, whenever they're thinking about their practice at night, they're probably doing in terms of like what a CFO would normally do for you?Joseph:Great question. So I think that a lot of them are trying to figure out top line revenue which when we talk about top line revenue, what is the amount of services that have been delivered? We can measure revenue a couple of different ways. As someone comes in the practice and as they get a treatment and they get a cleaning, they get an exam, once that service has been performed, you are owed that money.Joseph:So that could be one way that we measure revenue. One of the ways that you can pull that out is pull that out of your practice management software. So they're trying to get an idea of how much revenue is generated. So the next piece of that, that I think that a lot of practice owners are looking at is how much cash is coming in the door?Joseph:So there are certain times that 100% of the service that you provide turns into cash the same day, or within a couple of days, if somebody writes you a check, brings you cash or pays with a credit card. So there's not often a lag time between those. What is most common is that there is a lag time between when the service is performed, when the revenue is generated and when the cash actually comes in the door. That's where there's often a difference in timing.Joseph:That timing, if you've got a great front office billing person, that's billing and pushing claims out the door, that may just be five days between the time we send it to the PPO insurance company and the time that an EFT shows up into our bank account. We may have patients that are paying us out a month to month to month.Joseph:We may have somebody that pays in full with care credit, or with a credit card that turns into money in the bank account within a couple of days. So all of those things, I think that small practice owners are trying to get their arms wrapped around all of these different things as money comes in the door, as revenue is generated. Then what they're trying to do is they're trying to figure out, okay, did I make enough money this month to pay rent, to pay my people, to pay my supply bill, to pay my lab bill, and hopefully to pay myself?Joseph:So if I'm set up and I've got payroll running out, hopefully I've generated enough cash coming into the practice to cover all of those expenses. Then at the end of the day, whatever is left over, it depends on who you talk to, but we'll just call it profit. Profit is the simplest way of doing that. As the money came in and the money went out, do you have more money in your bank account today than you did 30 days ago? Then I would call profit.Jonathan:So try and get some type of an understanding of how they're making money in practice from revenue to expenses, and then eventually paying themselves and profit and things like that. All within the responsibilities of that dental practice owner, who also is generating production and revenue every day, and managing employees, doing the marketing, doing all the different things that go along with their business. So, with that in mind, what was it that you saw whenever you went to your ... When you started your role as a CFO?Jonathan:Again, I could see many of my practices, and many of our clients here at Tooth & Coin are having the same issues as the business that you got into at the time that you got into it as the CFO. Around that $3 million in revenue mark, you got a lot of practices that are around that level, half a million, a million, 2 million, 3 million, but $3 million mark.Jonathan:They get to be pretty busy in a small business. So what is it that you saw whenever you walked into that business in the first day in the role of the CFO, that really just hadn't been done that needed to be done from a CFO perspective. Because again, that owner of that business couldn't do everything. There's just no way that you could have that type of skill set to be able to do everything on your own.Jonathan:There's a reason there's a million employees at Bank of America. The CFO there is not ahead of every financial element. The CEO doesn't do all the COO and CFO and all the other roles and things. There's reasons why there's more than one person doing all of these things. So what was it that you walked in at day one, your becoming a CFO from the smaller medical business to grow into where it was?Joseph:Sure. I think the first thing I noticed is the wild swings and cashflow. It wasn't a matter of, we had the same exact amount of money that would come in every month and every day and we were pretty product heavy. So we had to spend quite a bit of money to provide these specific devices and services before we ended up actually delivering the service. So as you're paying your lab bill, as you're paying your supply bill, there's all these huge outflows that go, and they don't always match up with your revenue perfectly.Joseph:So I would see these wild swings in our cashflow. So, as an inquisitive person, if you see wild swings in the cashflow, the first question you're going to ask is why. So the first question I started asking was, "Well, how do we get to deposits into the bank account?"Joseph:Well, insurance companies write us checks, patients write us checks, we take credit cards, all these different things. That's how money turns into the bank account. I'm like, "Okay, well, how much did we generate in services last month, for example?" Okay, we'll pull the rapport and we got all the billing done. We got all the services delivered and we would pull the report and they'd say, "All right, well, we did 300,000 this month. That was a great month."Joseph:I was like, "Oh, okay. Well, what kind of service was that?" "Well, we did 300,000 this month." I was like, "No, no, no, no. Like specifically, you've got eight lines of business here. How much did you do in each one of those?" They're like, "Well, we can think of those couple of big ones that we delivered. I know that our shoe business was big. We had some big shoe," but it was very clear early on that they were not measuring revenue by line items.Joseph:So when you translate that to the dental practice, it's like, well, how many cleanings are you doing? How much hygiene are you doing? How many crowns are you doing? How many are you doing that are implants? It's like, the first thing that you've got to do is you've got to measure what specific revenue pieces you did in each month. So, if we're looking at the month of January, I'm going to say we did X amount on this, X amount of that, X amount on that. Then we as accountants, what we like to do is we'd like to compare.Joseph:So I came in and said, "Okay, well, you did 300,000 this month. Well, what'd you do last month?" "Oh, we'll have to go back and rerun that report. We don't remember what we ran. Oh, but we remember that May, of last year was a really, really good month. We should run that month." So it became very clear and apparent that they weren't measuring how the practice was doing month by month by service line.Joseph:So that was the first thing. So the first thing I did is okay, why don't we categorize our sales? Why don't we just make it simple and just have three or four different big buckets of sales that are all kind of related and we'll just measure those specific line items, rather than trying to do some kind of procedure code, because the healthcare practice that I was in, we had a thousand different procedure codes. Some of them were the big numbers and some of them were the small numbers and there's all these add-on codes for these additional things.Joseph:So it's like, I don't want to look at a revenue by code line item because I've got a thousand codes that we use in the course of the month. Why don't we break that down and summarize that into three or four different ones that we can measure? Why don't we look at that for this month versus last month versus the month before, and let's figure that out. So the next thing that I figure out, I get in there and I'm like, "Okay, so that number of 300, tell me what that number is? What makes up that number?"Joseph:They pulled it up and I started looking at the individual patients that made up that line. It became very clear that what they were calling revenue was usual and customary. We may refer to that in the dental world as the UCR, the usual and customary rate, or you could just say, that's your general fee. I said, "Okay, well, of this 300,000 that you generated in revenue, is that going to be what turns into collections in the bank?"Joseph:They're like, "Oh no, no, no, no, no. Insurances, they all take their discounts." I'm like, "Okay, well, that's probably where we need to start measuring revenue. We didn't do 300,000 revenue. We did much less than that. So let's come up and figure out what's the allowed charge." The next thing that I figured out is that whenever I went into the allowed charge, they had taken a standard discount off of everybody.Joseph:So we had, in the business that I was in and we had the Medicare allowed fee. So basically what they did was they keyed in the Medicare allowed fee for every single patient that came through the door. What's the problem with that? Problem with that is not every single patient is on Medicare. We've got Blue Cross Blue Shield, we've got Humana, we've got UnitedHealthcare. We've got TRICARE, we've got a number of these different ones and I'm like, "Well, how do we know what Blue Cross is going to pay us whenever Blue Cross comes in?"Joseph:They were like, "Oh, well, we just adjusted off the EOB, or the explanation of benefits whenever it comes in." I said, "Okay. So what you're telling me is whenever we've measured that revenue, we measured it at the Medicare allowed rate, but we're not going to make an adjustment for the Blue Cross rate until next month when they pay the claim or next week when they pay the claim or whenever they decide to pay the claim?" They said, "Yeah, that's what we do. That's when we adjust it."Joseph:I said, "So this $300,000 number is not a real number. The $250,000 is not a real number. So why don't we drill in and figure out, well, what are our contracted rates for all of these different insurance companies?" And as you can imagine, Jonathan, they were all different. Blue Cross had a certain percentage off of the Medicare allowed, United had a certain fee schedule that they had determined. TRICARE had something different. We had a workers' comp that would take a percentage off of our usual and customary rate.Joseph:So one of the things that I've always subscribed to is the Pareto principle or the 80/20 rule. So I was like, okay, why don't we 80/20 this thing. What 20% of our payers make up 80% of our revenue? So obviously to go through, we had hundreds of contracts. To go through hundreds of contracts and trying to get all of those fee schedules immediately ready, that would have taken months.Joseph:So I was like, why don't we just take the top 20% of our payers, the ones that pay us the most money and why don't we go ahead and make sure that that is correct inside of our billing software so that we were able to get to an allowed fee. The other thing that I figured out was that the Medicare allowed fee changes every year. Some years it goes up, some years it goes down. I'm like, "Well, what's that Medicare allowed fee?"Joseph:They were like, "Oh yeah, we loaded that in a couple of years ago." I'm like, "Okay, we should probably upload the current Medicare allowed fee. We should probably upload the current Blue Cross Blue Shield fee." Because one of the things is that as your accounts receivable people have money that's coming in the door and they have an EOB, we should know and expect to know what Blue Cross is going to pay us for this specific client, for this specific line item and if they pay us different, we need to know about that.Joseph:We need to investigate that, we need to follow up on that and say, "Well, is it because they paid us incorrectly? Is it because this is a Tennessee Blue Cross Blue Shield versus a Texas Blue Cross Blue Shield?" What are these differences that are inside of this? So I think that was where it first started was we need to start measuring revenue.Joseph:We need to start measuring revenue. We need to record it. We need to be measuring it month to month. We need to figure out what is revenue and it's obviously not your usual and customary. I was having this conversation with the dentist the other day. I said, "What was your production for the month of January?" She said it was $30,000.Joseph:I said, "Okay, well, tell me more about that number. What is that number?" She's like, "Oh yeah, that's the UCR." I said, "Okay, you understand that the UCR is not what your insurance company is going to pay you that you're in network with?" She was like, "Well, yeah, that's not the right number." I was like, "Okay, well, the first thing we need to do is we need to figure out what are you generating."Joseph:Because her question to me was how much can I afford to spend on you know, this next thing or this next loan, or can I hire another employee or can I increase my salary? Can I take a draw? Is my rent too high? She started asking these questions. I said, "Well, the first thing we got to figure out is how much money is coming in the door and how much revenue is coming in the door."Jonathan:There's usually a reason that revenue is the first thing on a profit and loss, because it's the first thing you're supposed to be able to know about. I find a big misconception inside of the dental space is that the CPA equals the CFO. When I try and tamper expectations with all of our clients is that, look, there is a lot more to revenue than just that first line item. Whenever you file a tax return, you file income. Sometimes you have a cost of services or whatever it is that you put down there as well, but revenues is a one line on the tax return, but it's much more than that. So would you say that's a fair statement to say that one of the jobs of the CFO, one of the responsibilities of small dental practice owners in their role as the CFO is to understand their revenue?Joseph:Absolutely. I think that's got to be where it starts. It's got to be where it starts because we got to understand ... So we've got to put expense models together and figure out how much we can afford based on our revenue. Obviously your revenue is going to fluctuate month to month, year to year. I'm looking at financials in January. Financials in January look a lot better than December. Why is that? Well, we took a week off for Christmas to New Year's.Joseph:So January, we worked full month. February will probably be shortened because we've got crazy snow storms that have hit the United States and people have been shut down for a week. So there's always going to be some fluctuation of revenue, but it's got to start with that. So then if we can figure out, well, what's a general rolling average that we can forecast out for revenue, then we can break that down per month and we can say, "Well, what did we do in July of last year?"Joseph:"Well, July is always a great big month for us, but it never is quite as big as August. August is so big because the kids are coming back to school. They want to get all their dental work before they go back to school. So August is always a big month in dental. March is always a big month in dental because of spring break."Joseph:So then we can forecast that stuff out and understand what our revenue's going to look like so that we can build our expense models based upon that. I think that's a big thing for CFOs is, people like to talk and use the word budget all the time. They're like, "We need a budget."Joseph:I'm like, "Well, we need a forecast is what we need." How many patients came in the door last month? How many of those were new patients? What percentage of that? What was the percentage of each one of the different service line items? So can we expect that to come back? If it's a hygiene client, are they going to be expected to come back in six months?Joseph:Well, we had X amount coming in January. That means that we know that we're going to get a certain percentage of those to come back in July and we can look and compare that and say, "Okay, well, what percentage of hygiene clients actually keep up with every six months?" Okay, well, it's not 100%. We wish it was 100%, but it's not 100%. Is it 90%? Is it 80%? Is it 50%?Joseph:Well, if it's 50%, we've probably got some things that we need to work on with our front office staff to make sure that we're confirming appointments, whether they were doing all the things that you guys know that we do in order to make sure that people are coming in for their six month checkups, but we can start forecasting and start getting a picture of what things are going to look like from here on out.Joseph:We can say, "Okay, well, if revenue, this month is $30,000, but our goal is $50,000 and we know that we're projecting that next month is going to be $40,000, we know that we've got 10,000 that we got to make up. So where are we going to make that up? Is it going to be new patients?" All right. So let's say that it's going to be in new patients. How many new patients do we need? How many of those are going to be hygiene patients versus emergency patients versus some more complex procedures that we're running specials on?Joseph:So these are all the things that when you try to get a handle on your top line revenue and get a handle of the money that the business is generating, these are things that are all going to project out so that you figure out what you're going to do money-wise moving forward.Jonathan:So you mentioned a lot of strategic game plan that was coming up. To me, it's like, step one, understand revenue. Step two, create a baseline of what it is we know is happening currently and then step three, would be to design some type of a game plan to effect those numbers, to try and create something around those things.Jonathan:So like you said, maybe it's that where we find that our deficiency is in our hygiene recall rate. Do we have enough of our patients coming back in for hygiene after they come in for the first time? Do we have enough people to getting back on the schedule today compared to whenever they come back in the future? Or do we let too many people just walk out with our unscheduled treatment?Jonathan:How many treatment plans did we do today and how many of those were actually on the schedule? Did we have a conversion issue? Understanding those different components after you have a bigger picture idea and understanding of that revenue allows you to start optimizing and influencing those numbers. So is that what a CFO's role is or is the CFO's role to influence those numbers or is it to unearth those numbers?Joseph:So I think it's both. I think a great CFO is going to do both. I think that if you look at the accounting world, one of the things that's tough about the accounting world is we're always looking backwards in time. We're looking at what happened last month, what happened last year. We're generating a tax return four or five months later after the year's closed. So, if you're trying to figure out what you're going to do with your business in May of a year, but you're waiting on last year's tax return to get done or last year's books to get done, you're always looking backwards.Joseph:I think the best CFOs that are out there do a combination of both. Number one, they're reporting the results in a way that'll help us understand the past, but they're also looking at all of the different pieces that we know that are going to happen in the future.Joseph:We're going to take some projections. We're going to make some assumptions. We're going to look forward and try to figure out what is life going to look like moving forward. Then we say, "Okay, life looking forward. If I take the snapshot of it today, that's not where we want to be. So let's figure out where we want to be. Why don't we create some goals around this? Why don't we create a monthly goal? Why don't we create a daily goal? If it's a number of new patients that are coming in, how many new patients should you be getting per day?"Joseph:Then we can start to influence those numbers and we can say, "Okay, we know that where we're at today is X. We want to be at 2X of where we are. What's the plan to get there." So that is where I think good CFOs are able to really, really hone in on a practice and really help you move forward and help you project to the future and make good, smart business decisions and influence those decisions and help your team understand how they influence those decisions.Jonathan:So how would it be, again, this is, this is a question that I get a lot is do you think that a CPA, someone who works as a CPA for a dental practice, that that CPA should be the CFO of that company?Joseph:I just think that it's got to be a lot more granular than that. As CPAs, we're typically reconciling banks daily, weekly, monthly. We're looking at financial statements, we're trying to get everything to tie out. We're doing everything that we can to make sure that the books are right, which is a very important part of your financial picture is understanding what your books look like. But I don't think that CPAs are equipped to be out there and to be in your practice to know like, well, how many confirmation calls did we have on patient schedules today?Joseph:Okay, well, we can track that. We can get it in the software. We can create all these different systems that are out there, and then maybe the CPA can look at that, but I think that that's outside of the CPA's role just because we don't have access to all that. We don't have the boots on the ground.Joseph:Now, if you have a full-time CPA that works in your office, many practices do. Huge, huge practices. Once you get to several, several millions of dollars, you're going to have a controller onsite that's going to help you out with some of this stuff. Maybe they're going to have a CFO on site once they get to that 10 or $15 million mark so that you can do that. But if you're a CPA and you're working with 20, 40, 50, 100, 200 clients, there's just no way that we can project all of that granular detail out in order to to do that and to fulfill that CFO role. That's certainly my opinion anyways.Jonathan:I agree. I see a lot of it because I speak to Dennis every week and it's not uncommon for me to hear someone say one of two things. One being that I need a CFO and they think that they need a CFO because they need someone who's going to help with all of these things. Then we can start digging into it and it's like they're doing three, four, $500,000 a year in revenue. Or even all the way up to say a million to $2 million a year in revenue.Jonathan:I need a CFO because I need someone who's going to do all of these things for me. Completely get an understanding of my revenue, which just for the listeners out there, that means we're going to have to understand your production philosophies, we're going to have understand the way that you view dentistry, the way that you view your patient care.Jonathan:As you dentists know, every other dentist is going to be different. So every CFO is going to have to understand that about you as the provider, as well as any other providers in your office. The way that we do that as data people is, we look at the production procedure code, service mixes, things like that, to be able to see what that looks like, but that's on a very high level.Jonathan:If we were to be the CFOs for you, that would be what we would have to do from a provider standpoint, for us looking at our provider level. What I tell most of these people is, "No, you don't really need a CFO. You just need more production right now. You need more revenue, you need to do more dentistry or have more patients," and that's basically all I can tell you.Jonathan:That's exactly what a CFO would tell you if they were to be engaged with you right now is, "We don't have enough revenue, we don't have enough production and we don't have enough patients." There might be some small problems that that person could uncover, but the amount of money you would have to pay someone to be able to do that, to uncover those problems would be a negative value compared to what they find, because you'd be paying them a whole bunch of money because it takes a whole lot of time to understand all of these elements for every business.Jonathan:While dentistry, yes is an industry and single office owner practices are similar in nature, they're all different. They're all different nuances and things like that and most of that nuance comes from the provider, the person that is doing the production.Jonathan:So I completely agree that the CPA role is not designed around this and the cost structure is not designed around this. If we're charging someone say a $1,000 a month for accounting, bookkeeping, tax planning, tax prep, projections, keeping updated on all the things that are going on in the dental ecosystem from a financial perspective, we don't have the ability to be able to make sure that Susie in the front is entering in the production correctly into the computer. That's not what we're engaged to do. The amount of money that we typically are getting paid for that, we don't have enough time in the day to be able to be helping with those types of things.Jonathan:So it then falls back on the dental practice owner to do those things, unfortunately. So I completely agree. It's, CPA does not equal CFO. I guess that's the point I'm trying to make with that, is that people sometimes think that they're the same person. It's a very specific subset. It's a different skillset, number one, and number two, it's not typically what you're paying your monthly fee for whenever you're seeing these people come in.Jonathan:So I mentioned earlier, there's two things. The first one was the person I'm talking about. They need a CFO and I don't think they really need one, and the second one is that they'll have already had a CFO and they'll be looking for someone new, which is the reason they're talking to me and I'll look at the work that's been done and it's literally just CPA work that's been done. It's not CFO work.Jonathan:So it's what you're saying here. It's financial statement analysis is all that that CFO is doing. To me, financial statement analysis, yeah, your CPA can help you with financial statement analysis. Almost every CPA can do that. I'm asking this to you, Joseph.Joseph:Yeah, absolutely.Jonathan:So every CPA can help you with financial statement analysis. Financial statement analysis is like one line item of things that CFOs do out of hundreds of things the CFOs do. So CPAs can help you with financial analysis, which is the things we talked about. The way that our firm does that is through a management report that we send out every month, where we're calculating out and are rolling quarterly averages and doing overhead analysis and things like that, but that just is the overall picture of the results of the practice.Jonathan:It is not the granular detail of, we did, say, three times more crowns this month than we did the month before. That does not exist on a financial side, on the traditionally prepared financial statement done by a CPA firm. So a lot of times what I'll tell people is lean on these softwares that can pull these data elements out of their practice management softwares, like Dental Intel is really good. Practice By Numbers is really good and they can do some of these practice management data calculations for you, but don't lean on your CPA for those things because we're not traditionally trained for those types of roles.Jonathan:A lot of the times what I tell people is that CFO role, we can find the problems, but we can't usually find the solutions if we're not in that practice every day. So you're paying a lot of money for someone just finding problems. Whereas in this industry, to me, if you're a smaller business, you have to be paying a practice manager consultant to find and fix those problems a similar amount of money. So when is it to you that a dental practice should consider having an outsourced CFO or a CFO and just in general, that is not that owner of that business.Joseph:I think that all the stuff that you're hitting on definitely says to that. So the question is, we're dealing with dentist who are very, very intelligent people. They're all very entrepreneurial because they went out and started their own practice, or they're thinking about starting our own practice and want to start their own practice.Joseph:So they've got that grit and grind about them to figure all of this stuff out. I really don't think that it's something that they can't handle on their own. I think that it really boils down to time. Do you have the time to devote to this? Do you have the resources, the manpower that you've got in your office to help you out with it? At the point where you're doing dentistry five, six days a week, and you're busting at the seams and your schedule's full, that's probably time that you can probably hire somebody else to do that.Joseph:I certainly think a lot of startups can benefit from having an overall plan and just kind of having some goalposts to operate on to help them out with that, but I don't know that there's actually a magic moment where you say, "I need to outsource a CFO." Certainly as the practice grows, if you had 50, 60 employees or more, I think that's kind of like the traditional, that's the point where you need to have a CFO.Joseph:Once you're probably at probably 25 or 30 employees or more, you probably need to have some kind of a controller in place. Another question is like, well, at what point do you have an HR manager in place? Well probably when you get to about 75 employees. So I say that to say like the businesses that you and I work with, almost all of them are single office, two office, way, way smaller than that.Joseph:I think that they'll be able to wrap their arms around a lot of it, maybe with a little bit of coaching and some help on the side from some consultants and some practice analytics, different pieces that they can figure out there and certainly podcasts like ours, where they get a chance to go out and learn, like, what are the things we need to be looking at and measuring?Joseph:Okay, well, this is what we need to be looking at. Let's go measure it now inside of our software. We knew that we probably could, but now we know this is what we need to go look at. So I don't know. What are your thoughts on that, Jonathan? That's a really good question. It's probably one that several of our clients hem-haw around about.Jonathan:So to me, I don't see much of a reason for a CFO on a practice. From a traditional CFO role, I don't see any reason for a dental practice that's doing less than, probably at a minimum, 2 million a year in revenue. I don't see much of her need for a CFO. The money that you're going to pay for a CFO ... If we're talking dollars and cents here, if you're going to have a CFO, that's actually going to do the work that the CFO needs to do, you're talking like at a minimum, outsourced a day a week, maybe four grand a month, five grand a month is what you'll end up paying that person, if you're lucky.Jonathan:So 40, 60 grand a year for, not financial analysis, hopefully it's more than financial analysis, but basically looking for little problems and little tweaks that are going to have ... Let's say it adds a 10% increase to your revenue. That's great. That pays for that, but you got real lucky if that person finds a 10% change. More than likely what they're going to do is they're going to be overseeing stuff and helping set plans and game plans up and things like that.Jonathan:I just don't see that creating that much of an impact on that business. Conversely, you get a really good practice management consultant in there that can help you do a better job with your treatment planning or do a better job of turning nos into yeses when it comes to getting patients to accept care. Then that money spent is going to have a much higher impact on your practice from a dollars and cents perspective. So almost like my best financial advice is to not get financial advice from a CFO until you get to a level where the tweaks can be worth that dollar output effectively.Jonathan:To me, it depends on the practices and things involved. To me, it's probably at the three to $4 million range and about what you said. Somewhere 25, 30 employees. So for example, you hear about these practices and we have a few practices that are similar to this. That could be if expand and scale, but they'll do $2 million, $3 million in revenue and they'll have 20 or 15 employees.Jonathan:So they'll hit the revenue number, but not have as many employees. Those practices, they're probably already doing most of these things already because they got probably really high production per patient. They got really high operatory usage. They got really high efficiency from their employees, probably have really strong protocols in terms of their collections and payments and things like that. So those things are probably already in for those types of offices, but we're talking about is whenever there gets to be a lot of people involved, a lot of revenue and a lot of patients.Jonathan:That's, to me, when optimization starts creating an unexpected value that's high enough to be able to pay someone else to come in and help analyze and optimize and strategize around those numbers. So that's kind of my thing. So real rough numbers, but at the bare minimum, 2 million a year in revenue, probably closer to 3 million before you start having that conversation. Then also somewhere around that 30 employee and up mark is where you start having someone that can start doing this for you, or start paying someone to be able to do that for you.Jonathan:Real rough numbers, but every situation is a little bit different case by case basis, but that's in general what I would be saying. So we talked about some of the problems today that the dentists are facing is one, an understanding of revenue. Understanding what revenue is, how to analyze it, how to record it, how to you ... See what it is that you're doing.Jonathan:What does revenue equal, and what does that mean in dollars and cents perspective? Then what does cashflow mean? Then coming up with a game around those things. So one of the things that we're doing on this podcast is we're highlighting problems and then we're going to try and create episodes around how to address those problems. So expect in a future episode for us to talk about these problems and give you different ways, as a listener, to be able to come up with solutions and to be educated in these problems so that you can do some of these things on your own.Jonathan:So that is our episode on the CFO role in dental practices. We may do a follow-up episode in the future, but that is the episode for that. So any closing thoughts on the CFO's role in dental practices, Joseph?Joseph:I think the dental industry is just a great industry in general. It's something that I'm excited to be out helping dentists. Super, super smart men and women. Very, very, very hardworking. Very entrepreneurial. So a lot of this stuff, at the smallest of the small scales, at the small offices, they'll be able to figure it out. They'll be able to make those decisions internally and as you grow, that's going to be the point where you've got to figure out at what point does it make sense to invest in additional health.Jonathan:As a final thought, what are some of the other problems that a CFO can help with? We talked about understanding revenue, we talked about coming up with a game plan and I guess another thing would be to track the success or failures of that game plan. Is that accurate?Joseph:Yeah. I think one other things that I think a great CFO will help you out in the dental space with is figuring out what does your insurance reimbursement look like. I know there was a point in time where pick a company shows up and says, "Hey, we want you to be a network with us," let's say at Cigna, "And we're going to offer you X," and that's significantly below what your usual and customary is. So the question becomes, can we afford to take this contract?Joseph:It could be United or Concordia, or it could be any number of places. What's that look like? What's the financial impact of that look like? I talked to a client one time that was in the Midwest that was close to an insurance headquarters and they wanted to drop their reimbursements by, I think it was 30%.Joseph:I said, "Hey, by the way, we're making cuts. You guys are on the hook for 30%." So then the question becomes, and this is a great CFO question. So what percentage of your patient base does this insurance carrier represent and how much dollars in revenue does that mean per year and if we take a 30% hit in that specific insurance carrier, how does that project out? What this practice was able to figure out was that it would have been a couple of staff members.Joseph:I think that the impact of this was like two staff members. So they wrote the insurance company back and said, "We're not going to be in network with you anymore if you continue to say this, because every one of our staff members are important to us and you're taking away two jobs from our practice, and we choose not to do that."Joseph:That's a great CFO project to look at. Certainly, there's smaller contracts that you can afford to take bigger losses on and that kind of thing if you wanted to, but I think that understanding insurance reimbursements and your contracts and all those things. Of course, there's always plenty of people that you can outsource, you can do this with, but that's a big CFO role.Joseph:What's the impact of this specific contract going to be and how's that going to go? One of the markets that I was in had a big, huge FedEx plant and the FedEx switched insurance carriers and the insurance carriers dropped everybody that was in network. So it was like, oh my gosh, are we going to survive? Because so much of this town's employees ... And it was like, well, let's run the numbers. Let's see.Joseph:Well, it turned out that out of, let's say, 100% of the total revenue, only 5% of it was this specific insurance carrier. So I think we're going to be okay. It's not going to be great. It's not going to be helpful, but I think those are great things for CFOs to get a chance to look at for you.Jonathan:Cool, awesome. So we will follow up with those in future episodes. Stay tuned to the Tooth & Coin podcast to hear more about the different problems inside of the dental industry, from a financial management perspective that we will be addressing here on the Tooth & Coin podcast. So we thank you very much and we'll see you next time.Jonathan:That's it for today, guys. I hope you enjoyed this episode of the Tooth & Coin podcast. If you are going to be a practice owner or a new practice owner, and you're interested in CPA service, head on ever to toothandcoin.com where you can check out more about our CPA services. We help out around 250 offices around the country and we'd love to be able to have the discussion about how we could help your new practice.Jonathan:We do specialize in new practice owners. So people that are about to be an owner of a practice they're acquiring, about to be an owner of a practice they are starting up or has become an owner in the past five years. That is our specialty. We'd love to be able to talk to you about how we could help you in your services with your tax and accounting services.Jonathan:If you enjoyed today's episode, again, go to the Facebook group. Talk to us about what we've talked about. Join in on the discussion and let's create an environment where we can talk about some of these things so that we can all help each other get through these things together so that this adventure of business ownership is more fun, more productive, and better in the longterm.Jonathan:Lastly, if you want access to those resources that we are currently building, just text the word toothandcoin to 33444. That's toothandcoin, no spaces. T-O-O-T-H-A-N-D-C-O-I-N to 33444. Reply with your email address, we'll send instructions in the Facebook group. We'll send you the resources when they're available and we will see you next week.

To support the ministry and get access to exclusive content, go to: http://patreon.com/logicalbiblestudy Matthew 1: 18-22 - 'How Jesus Christ came to be born.' Catechism of the Catholic Church Paragraphs: - 497 (in 'Mary's Virginity') - The gospel accounts understand the virginal conception of Jesus as a divine work that surpasses all human understanding and possibility: “That which is conceived in her is of the Holy Spirit,” said the angel to Joseph about Mary his fiancée. The Church sees here the fulfillment of the divine promise given through the prophet Isaiah: “Behold, a virgin shall conceive and bear a son.” - 333 (in 'Christ with all his angels') - They protect Jesus in his infancy, serve him in the desert, strengthen him in his agony in the garden, when he could have been saved by them from the hands of his enemies as Israel had been (abbreviated) - 437 (in 'Christ') - God called Joseph to “take Mary as your wife, for that which is conceived in her is of the Holy Spirit,” so that Jesus, “who is called Christ,” should be born of Joseph’s spouse into the messianic lineage of David (abbreviated) - 486 (in 'Who was Conceived by the Holy Spirit') - The Father’s only Son, conceived as man in the womb of the Virgin Mary, is “Christ,” that is to say, anointed by the Holy Spirit, from the beginning of his human existence, though the manifestation of this fact takes place only progressively: to the shepherds, to the magi, to John the Baptist, to the disciples (abbreviated) - 430 (in 'Jesus') - Jesus means in Hebrew: “God saves" (abbreviated) - 452 (in 'The Only Son of God') - The name Jesus means “God saves.” The child born of the Virgin Mary is called Jesus, “for he will save his people from their sins” (Mt 1:21): “there is no other name under heaven given among men by which we must be saved” (Acts 4:12). - 1507 (in 'Heal the Sick') - The risen Lord renews this mission (“In my name . . . they will lay their hands on the sick, and they will recover.” and confirms it through the signs that the Church performs by invoking his name. These signs demonstrate in a special way that Jesus is truly “God who saves.” - 1846 (in 'Mercy and Sin') - The Gospel is the revelation in Jesus Christ of God’s mercy to sinners. The angel announced to Joseph: “You shall call his name Jesus, for he will save his people from their sins" (abbreviated) - 2666 (in 'Prayer to Jesus') - But the one name that contains everything is the one that the Son of God received in his incarnation: Jesus. The divine name may not be spoken by human lips, but by assuming our humanity. The Word of God hands it over to us and we can invoke it: “Jesus,” “YHWH saves" (abbreviated) - 2812 (in 'Hallowed be Thy Name') - Finally, in Jesus the name of the Holy God is revealed and given to us, in the flesh, as Savior, revealed by what he is, by his word, and by his sacrifice (abbreviated) - 744 (in 'The Spirit & the Church in the Last Days') - In the fullness of time the Holy Spirit completes in Mary all the preparations for Christ’s coming among the People of God. By the action of the Holy Spirit in her, the Father gives the world Emmanuel, “Godwith-us” (Mt 1:23). Got a Bible question? Send an email to logicalbiblestudy@gmail.com, and it will be answered in an upcoming episode! --- Send in a voice message: https://anchor.fm/daily-gospel-exegesis/message

Our God is in complete control of everything, and He works His divine purposes according to His will.----The evil works that men propose for bad, God proposes those same works for good and His glory.----Joseph was kidnapped, enslaved, and imprisoned, so that God could by him save many people alive from terrible famine.----God used the wicked acts of sinful men to crucify Jesus, thereby accomplishing His design that Christ should be sacrificed to redeem poor sinners from wrath.----Though this is true, we often misapprehend what God's purposes are in man's evil deeds. We cannot understand how God intends them for the good of His people and the glory of His name-----Peter thought God could not work gloriously by the murder of His Dear Son at Calvary, but Peter was wrong-----Consider that statement in the martyr Stephen's great defense- -Moses supposed his brethren would have understood how that God by his hand would deliver them- but they understood not.-----Stephen was referring to the time when Moses intervened during a beating of an Israelite man by an Egyptian, killing the tyrant and rescuing his kinsman.----Stephen had been falsely charged of blasphemy against Moses, the law, and the temple.----Stephen's response- Your fathers betrayed Joseph- You fathers rejected Moses- Your fathers overthrew the law, worshiped a golden calf and then the pagan gods, until God sent you to exile in Babylon-----Worst of all, you've rejected Moses' commandment regarding listening to Messiah, and instead you have betrayed and murdered Him on the cross-----This truth so enraged the rulers of Israel, that they took poor Stephen out and murdered him too.----But consider Moses' confusion.

Joseph cares so deeply for his kids and you will get some awesome ideas on how to connect with your kids. "Don't dwell on the past, it's about moving forward and what's next in your life." Joseph You can find us on Facebook at https://www.facebook.com/groups/RockingLifePodcast where you can join our free Facebook group. The Rocking Life community will be a place where thousands of people find their footing and get traction after they have gotten stuck, lost, lonely after divorce. It will be a safe place to get started on a new journey to climb towards the summit of the mountain with the help of experienced fellow climbers. If you want to have your question answered on a future podcast you can email your question to rockinglifepodcast@gmail.com or record your question via a link in the podcast description and we will try to answer as many questions as possible. In the Facebook group, we will have regular teaching and Live Q&A sessions where you can ask your questions as well. --- Send in a voice message: https://anchor.fm/rockinglifeafterdivorce/message Support this podcast: https://anchor.fm/rockinglifeafterdivorce/support

To support the ministry and get access to exclusive content, go to: http://patreon.com/logicalbiblestudy Matt 1: 1-16, 18-23 - 'The ancestry and conception of Jesus Christ.' Catechism of the Catholic Church Paragraphs: - 437 (in 'Christ') - God called Joseph to “take Mary as your wife, for that which is conceived in her is of the Holy Spirit,” so that Jesus, “who is called Christ,” should be born of Joseph’s spouse into the messianic lineage of David (abbreviated) - 333 (in 'Christ with all his angels') - From the Incarnation to the Ascension, the life of the Word incarnate is surrounded by the adoration and service of angels. When God "brings the firstborn into the world, he says: 'Let all God's angels worship him.'" Their song of praise at the birth of Christ has not ceased resounding in the Church's praise: "Glory to God in the highest!" They protect Jesus in his infancy, serve him in the desert, strengthen him in his agony in the garden, when he could have been saved by them from the hands of his enemies as Israel had been (abbreviated). - 497 (in 'Mary's Virginity') - The Gospel accounts understand the virginal conception of Jesus as a divine work that surpasses all human understanding and possibility: "That which is conceived in her is of the Holy Spirit", said the angel to Joseph about Mary his fiancee. The Church sees here the fulfilment of the divine promise given through the prophet Isaiah: "Behold, a virgin shall conceive and bear a son." - 486 (in 'Who was Conceived by the Holy Spirit') - The Father’s only Son, conceived as man in the womb of the Virgin Mary, is “Christ,” that is to say, anointed by the Holy Spirit, from the beginning of his human existence, though the manifestation of this fact takes place only progressively: to the shepherds, to the magi, to John the Baptist, to the disciples (abbreviated) - 430 (in 'Jesus') - Jesus means in Hebrew: “God saves" (abbreviated) - 452 (in 'The Only Son of God') - The name Jesus means “God saves.” The child born of the Virgin Mary is called Jesus, “for he will save his people from their sins” (Mt 1:21): “there is no other name under heaven given among men by which we must be saved” (Acts 4:12). - 1507 (in 'Heal the Sick') - The risen Lord renews this mission (“In my name . . . they will lay their hands on the sick, and they will recover.” and confirms it through the signs that the Church performs by invoking his name. These signs demonstrate in a special way that Jesus is truly “God who saves.” - 1846 (in 'Mercy and Sin') - The Gospel is the revelation in Jesus Christ of God’s mercy to sinners. The angel announced to Joseph: “You shall call his name Jesus, for he will save his people from their sins" (abbreviated). - 2666 (in 'Prayer to Jesus') - But the one name that contains everything is the one that the Son of God received in his incarnation: Jesus. The divine name may not be spoken by human lips, but by assuming our humanity The Word of God hands it over to us and we can invoke it: “Jesus,” “YHWH saves" (abbreviated) - 2812 (in 'Hallowed be Thy Name') - Finally, in Jesus the name of the Holy God is revealed and given to us, in the flesh, as Savior, revealed by what he is, by his word, and by his sacrifice (abbreviated). Got a Bible question? Send an email to logicalbiblestudy@gmail.com, and it will be answered in an upcoming episode! --- Send in a voice message: https://anchor.fm/daily-gospel-exegesis/message

These famous words are from the story of Joseph: "You meant it for evil, but God meant it for good." The great truths that God is utterly sovereign, and that he is weaving everything together for a salvation purpose, all come to us in power as we trust in Christ.

Matthew 1: 16, 18-21, 24 - 'How Jesus Christ came to be born.' CCC Passages: - 437 (in 'Christ') - God called Joseph to “take Mary as your wife, for that which is conceived in her is of the Holy Spirit,” so that Jesus, “who is called Christ,” should be born of Joseph’s spouse into the messianic lineage of David (abbreviated) - 333 (in 'Christ with all his angels') - From the Incarnation to the Ascension, the life of the Word incarnate is surrounded by the adoration and service of angels. When God "brings the firstborn into the world, he says: 'Let all God's angels worship him.'" Their song of praise at the birth of Christ has not ceased resounding in the Church's praise: "Glory to God in the highest!" They protect Jesus in his infancy, serve him in the desert, strengthen him in his agony in the garden, when he could have been saved by them from the hands of his enemies as Israel had been (abbreviated). - 497 (in 'Mary's Virginity') - The Gospel accounts understand the virginal conception of Jesus as a divine work that surpasses all human understanding and possibility: "That which is conceived in her is of the Holy Spirit", said the angel to Joseph about Mary his fiancee. The Church sees here the fulfilment of the divine promise given through the prophet Isaiah: "Behold, a virgin shall conceive and bear a son." - 486 (in 'Who was Conceived by the Holy Spirit') - The Father’s only Son, conceived as man in the womb of the Virgin Mary, is “Christ,” that is to say, anointed by the Holy Spirit, from the beginning of his human existence, though the manifestation of this fact takes place only progressively: to the shepherds, to the magi, to John the Baptist, to the disciples (abbreviated) - 430 (in 'Jesus') - Jesus means in Hebrew: “God saves" (abbreviated) - 452 (in 'The Only Son of God') - The name Jesus means “God saves.” The child born of the Virgin Mary is called Jesus, “for he will save his people from their sins” (Mt 1:21): “there is no other name under heaven given among men by which we must be saved” (Acts 4:12). - 1507 (in 'Heal the Sick') - The risen Lord renews this mission (“In my name . . . they will lay their hands on the sick, and they will recover.” and confirms it through the signs that the Church performs by invoking his name. These signs demonstrate in a special way that Jesus is truly “God who saves.” - 1846 (in 'Mercy and Sin') - The Gospel is the revelation in Jesus Christ of God’s mercy to sinners. The angel announced to Joseph: “You shall call his name Jesus, for he will save his people from their sins" (abbreviated). - 2666 (in 'Prayer to Jesus') - But the one name that contains everything is the one that the Son of God received in his incarnation: Jesus. The divine name may not be spoken by human lips, but by assuming our humanity The Word of God hands it over to us and we can invoke it: “Jesus,” “YHWH saves" (abbreviated) - 2812 (in 'Hallowed be Thy Name') - Finally, in Jesus the name of the Holy God is revealed and given to us, in the flesh, as Savior, revealed by what he is, by his word, and by his sacrifice (abbreviated). logicalbiblestudy@gmail.com, and it will be answered in an upcoming episode! --- Send in a voice message: https://anchor.fm/daily-gospel-exegesis/message

Greetings! Welcome to Lechem Panim. We are continuing today our study of the epistle of 1 John, a book that was written during a time when there were those who were trying to lead the Church astray. And one of the things these early gnostics  were teaching was that it didn't really matter how you lived in the flesh. Do whatever you want; because eventually you are going to be saved out of your flesh anyway. This ideology was very new age like in its teaching. Cheap Grace-- Now while most Christians today would say Christians ought not to sin, some Christians (if they can be called Christians) keep sinning time and time again. And they do so not because they are ignorant of the fact that what they are doing is sin, but because they have a cheap view of grace. They think they can watch whatever they want to watch; look at whatever they want to look at; think about whatever they want to think about; talk however they want to talk and then just say a quick prayer afterwards and everything will be ok. But that is not how we are called to live. Why does John write this letter at all? He tells us in 2:1a… 1 John 2:1 (NIV)-- 1 My dear children, I write this to you so that you will not sin. Powerful Purpose Statement-- That's a pretty powerful purpose statement for your book. He's saying,"I'm going to help empower you; to help strengthen you; to give you the spiritual equipment you need to have complete victory over sin.” We May Stumble— Now does this mean we cannot sin? No, because everybody is vulnerable to temptation; even Jesus was. And succumbing to temptation is always a choice. And sometimes Christians (even holy Christians) may stumble into sin. That is why John says here, as a means of encouragement… 1 John 2:1b-2 (NIV)-- …But if anybody does sin, we have an advocate with the Father—Jesus Christ, the Righteous One. 2 He is the atoning sacrifice for our sins, and not only for ours but also for the sins of the whole world. We Can Stand-- But notice John doesn't say, "when anybody does sin” but “if anybody does sin”. While the possibility to fall is always there, so also the ability to stand is always there. And we can choose the right path; the way of obedience. Because if we don't do so consistently, then we clearly do not know or love Christ. This is why John says in the next verse (verse 3)… 1 John 2:3-6 (NIV)-- 3 We know that we have come to know him if we keep his commands. 4 Whoever says, “I know him,” but does not do what he commands is a liar, and the truth is not in that person. 5 But if anyone obeys his word, love for God[a] is truly made complete in them. This is how we know we are in him: 6 Whoever claims to live in him must live as Jesus did. Christ's Life the Model-- And verse six points us to the reality that Jesus always intended the life that He lived on earth to be a model for how we ourselves were to live on earth. We are to walk in his footsteps, not only in his mission, but also his righteousness. We are to love the way He loves; we are to care about the people that He cares about; and we are to remain so close to Him that His righteousness becomes ours.  A Sign of Holiness Manifested in our Lives— Now how is that righteousness manifested? I am sure that you could list a dozen different things right off the top of you head. You could say, “A stronger prayer life; a growing hunger for God's Word; a changing of your thought life.” But what does John focus on here. It is very interesting what he chooses; how practical John gets in this next section; as to what is that ultimate thing that sums up how the holiness of God is revealed as being manifested in your life. He says it is revealed in how you and I treat one another. 1 John 2:9-11 (NIV)-- 9 Anyone who claims to be in the light but hates a brother or sister[a] is still in the darkness. 10 Anyone who loves their brother and sister[b] lives in the light, and there is nothing in them to make them stumble. 11 But anyone who hates a brother or sister is in the darkness and walks around in the darkness. They do not know where they are going, because the darkness has blinded them. “I'll Be Right Back”-- [Pious Lydia was kneeling down saying her prayers when her four-year-old brother sneaked up behind her and pulled her hair. “Pardon me, God,” said Lydia. “I'll be right back after I kill my brother”]. Now we always can find a good reason to harbor bitterness towards another person. Often times we feel justified in doing so because of some wrong that they have done to us in the past. But here John says that there is no room in a Christian's life for those kinds of feelings. We need to love, even when it is difficult; even when that might involve our forgiving them for something monumental. Joseph-- You know, in talking about this verse I cannot help but think of the story of Joseph; how he ended up in prison for a crime he didn't commit; living the life of prisoner-slave. God had made a promise to his great-grandfather Abraham to make his descendants a great nation and he finds himself (to all appearances) cut off from that inheritance. Why? Because his own jealous brothers hated him so much that (as an alternative to killing him and so that they could make a buck off him) sold him into slavery. Joseph had every excuse to go to sleep every night cursing their names; naming every rat he saw in that prison after one of them. He could have let hatred consume him. But what is amazing to me is that he never does that. He keeps his heart pure. And because of that, God grants him favor in everyone's eyes and he eventually (because of the providence of God) rises to become the second in command of all of Egypt. And his brothers then come because of the famine and present themselves before him (not recognizing him). And Joseph has the perfect opportunity to exact that revenge. But he doesn't. He tests them, but he never exacts any kind of revenge. Instead he spares them and pours out his love for them. And you and I are left in kind of a stupor. How was it that Joseph was able to forgive them after all that they had done to him? And his own brothers don't believe it. In fact, they believe that after their father is dead, then Joseph will surely kill them. Genesis 50:15-21 (NIV)-- 15 When Joseph's brothers saw that their father was dead, they said, “What if Joseph holds a grudge against us and pays us back for all the wrongs we did to him?” 16 So they sent word to Joseph, saying, “Your father left these instructions before he died: 17 ‘This is what you are to say to Joseph: I ask you to forgive your brothers the sins and the wrongs they committed in treating you so badly.' Now please forgive the sins of the servants of the God of your father.” When their message came to him, Joseph wept.18 His brothers then came and threw themselves down before him. “We are your slaves,” they said. 19 But Joseph said to them, “Don't be afraid. Am I in the place of God? 20 You intended to harm me, but God intended it for good to accomplish what is now being done, the saving of many lives. 21 So then, don't be afraid. I will provide for you and your children.” And he reassured them and spoke kindly to them. Recognizing God's Plan-- It is such an amazing thing to me; not only that Joseph is able to forgive; but how he is able to forgive. He was able to forgive because he saw how their sin against him allowed God to do something great through Him to accomplish His purpose. He was able to forgive because he recognizes and accepts that plan God had for His life. Can We Have That Perspective?— When is the last time you and I were hurt by somebody in any context; and we immediately were able to forgive and release them in Christ and even love them because we saw how God was using what they intended for evil to produce good in or through you. That is stunning to me; that someone can have such a perspective. This is What it Means to Walk in the Light-- Now I want to impress this upon you because a love that can allow you to forgive like that; that is at the heart of what it means to be the Church. It doesn't matter what has been done to you; what differences separate us; we are to love our brothers and sisters in Christ and those in the world we engage with. If we cannot do this, John says we are then those who still walks in darkness. Radical Holiness— Is this radical? Yes. That is what Christ's call to holiness is. A complete change of who we are that affects how we live, how you and I see our circumstances and relationships with other people; a change of mind and a change of heart. The ability to walk in the light of the kingdom and not in the shadow of the world. That is depth of the salvation Christ offers; a present transformation where our hearts become oriented on Him. And that orientation can start right here today when you say, “Jesus, I am tired of walking in darkness. I'm tired of the shadows. Help me to walk in the light as you are in the light. Separate me from all darkness. Make me holy as you are holy so that I might live and walk victoriously as I abide in you.” Invitations to Freedom-- Dr. Dennis Kinlaw (former President of Asbury College) expressed his gratitude for John Wesley making clear something very important. God's commands are also God's implicit promises. “If God tells me to have a pure heart, it is because he has the power to purify my heart. If he tells me to live above conscious sin, it means he can keep me there; he will enable me not to sin. His commands are promises that he will do in me all that I need him to do. His commands are not burdens, but invitations to freedom.” Romans 6:12-14 (ESV)-- 12 Let not sin therefore reign in your mortal body, to make you obey its passions. 13 Do not present your members to sin as instruments for unrighteousness, but present yourselves to God as those who have been brought from death to life, and your members to God as instruments for righteousness. 14 For sin will have no dominion over you, since you are not under law but under grace. ​Let us embrace that freedom today. Amen.

00;00;14;09 [Jason]: Jason Watson with WCG Incorporated here in ColoradoSprings, we're a local tax and accounting firm. Joined by RachaelWeber and Joseph Bassett, both tax professionals for us. We'realso hosted by Axe and the Oak here in Colorado Springs, they'vebeen gracious enough to open up early for us, part of our Bourbonand Business00;00;31;29 series, podcasts and videos. We just got done wrapping up a videoand podcast on some of the bigger deductions that we see, cars,that's always a big one for most small00;00;42;29 business owners, meals and travel. We're going to talk this time or,this time around about home office and then all the other likegoofier ones, if you will.00;00;54;25 So, you know, tell me the rules, Rachael, on the home officededuction.00;01;00;04 [Rachael]: It's got to be used regularly and exclusively00;01;03;27 [Jason]: Okay.00;01;04;26 [Rachael]: In your home.00;01;05;13 [Jason]: Okay, regular and exclusive and have a business.00;01;09;01 [Rachael]: A Business purpose.00;01;09;14 [Jason]: That's probably true for every deduction on a plan, right?00;01;12;18 [Rachael]: Yeah.00;01;12;27 [Jason]: For a business deduction to be a legitimate businessdeduction it has to have a business purpose. So, use regularly andexclusively. So, can you break those words down for me? What's"regular" mean?00;01;23;15 [Rachael]: "Regular" means you would be checking your emails,invoicing your customers, doing administrative work. Okay. Meetingwith clients, holding your inventory. It could mean a whole host of00;01;37;27 [Jason]: Right.00;01;38;03 [Rachael]: of things. You're just doing that on a regular basis, notonce a month00;01;42;26 [Jason]: Right.00;01;43;14 [Rachael]: but on a regular basis.00;01;44;21 [Jason]: Yeah. And one of the words that the IRS will also use too is"continuous", right? This is regular and continuous, it's, it's, got alife, you know, it's got a cycle.00;01;53;28 [Jason]: So yeah, absolutely, regular is a big deal. We have folksthat have a rental, one rental, you know, they have a W-2 job, theyhave all those things and they're trying to say, I have a home officeto manage my rental. It's just never going to happen. Now, if wehave 10 rentals, 6 rentals, that's all you do is manage your00;02;11;02 rentals. We have some people that have 3 or 4 VRBOs or Airbnb,short term rentals and that is all they do.00;02;18;24 [Rachael]: Time consuming.00;02;18;29 [Jason]: Their working that stuff 100% so yeah, so that's regular.How about exclusive Joe? Joseph? What's exclusive?00;02;24;27 [Joseph]: So, let's say you have an extra room in the bedroomthat's you want to use for your home office and it also can't be yourtheater room. So you know, that's gotta be exclusively used forbusiness.00;02;33;20 [Jason]: What if you're a videographer and the theater is yourbusiness? I'm teasing you.00;02;38;03 [Joseph]: Well, you have an argument there. Or, or00;02;38;24 [Jason]: No, but you can't mix the use, yeah00;02;41;07 [Joseph]: Right, unless you run a daycare out of your00;02;42;13 [Jason]: Right.00;02;42;21 [Joseph]: House as well.00;02;43;05 [Jason]: Yeah, and daycare has its own special rules and this is notthe podcast for that because00;02;47;27 [Joseph]: Right.00;02;48;01 [Jason]: I don't know those rules by a memory. I look them up oncein awhile when I have to, but that's it. But right, those are some ofthe shared use stuff can be daycare. Other than that, it's regularand exclusive with a business purpose. So, tell me some of thebank, the benefits of having a home office00;03;05;25 deduction or home office reimbursement.00;03;08;10 [Rachael]: Reimbursement? Is that part of your mortgage interest?00;03;13;15 [Jason]: Okay.00;03;13;23 [Rachael]: Your real estate taxes,00;03;15;05 [Jason]: Okay.00;03;15;19 [Rachael]: Utilities.00;03;16;21 [Jason]: Okay.00;03;17;09 [Rachael]: Could become a small deduction.00;03;19;21 [Jason]: Okay.00;03;21;11 [Rachael]: For you, a business deduction.00;03;21;18 [Jason]: Yeah absolutely. And what are some of those expensesthat aren't otherwise available to be deducted? And mortgageinsurance, we say yes, right?00;03;27;29 [Rachael]: Mm-hmm00;03;28;14 [Jason]: Schedule A property taxes, we say yes, but how about theother ones?00;03;31;04 [Rachael]: Utilities, insurance00;03;33;19 [Jason]: HOA dues.00;03;34;21 [Rachael]: Yeah. Mm-hmm.00;03;35;24 [Joseph]: Repairs. Okay, so suddenly those become deductible andin a world where otherwise it wouldn't be.00;03;40;11 [Rachael]: Right.00;03;40;21 [Joseph]: Yeah.00;03;41;01 [Jason]: Okay, and how do we calculate that home officededuction?00;03;45;17 [Rachael]: Well we do it by square footage.00;03;48;07 [Jason]: Yeah, that is probably the most common, is squarefootage. You could do it at room by room, the IRS allow that, theyactually mentioned that in Publication, what? 587, or whatever it is.But I've never seen anybody do room by room.00;04;00;15 [Rachael]: No.00;04;00;20 [Jason]: It's always, usually, I shouldn't say always, but usually it'ssquare footage, yeah. So what's the basic calculation? It's thehome office space divided by00;04;09;24 [Joseph]: Total space of the house.00;04;10;26 [Jason]: Yeah, the total space of the house. What if you use yourgarage, then what do you do?00;04;15;08 [Joseph]: You include it.00;04;16;12 [Jason]: Include it where?00;04;17;08 [Joseph]: In both.00;04;18;01 [Jason]: In both numerator and denominator? Yeah, exactly. So ifwe're going to take the benefit of the garage and it's not otherwisein the denominator then we have to add it in.00;04;29;26 [Rachael]: Mm-hmm.00;04;30;02 [Jason]: Yeah, exactly. So, that's home office. What's this 50 milerule thing? Who wants to talk about that?00;04;38;14 [Joseph]: Right, so the 50 mile rule's, you know, kind of a safeharbor if you will, that if you know, your home office is within 50miles of your tax home then you can, you know, deduct expensesassociated with00;04;50;29 commuting from the tax home to the home office.00;04;54;17 [Jason]: Yeah, exactly. It's, they want, "they" being the IRS and thetax court, they want your home office to be, there's no written ruleon this, it's more of a contrived rule.00;05;06;23 But your home office needs to be within 50 miles of your tax home.Your tax home is where you earn your revenue. So, the greatexample, in one of the tax court cases, is a surgeon had a home inPennsylvania.00;05;23;05 He drove to New York, I believe, and it was 130 miles away. He wasattempting to deduct all those commuting expenses and becausehe was like, well, I got a home office. So then my commute is frommy bedroom to the basement. And then when I hop in the car, it'sall business miles, and of course the00;05;43;06 IRS and tax court said "No." They said it's too far from your taxhome, basically. So they dis, disallowed all those expenses asdeductible expenses and00;05;54;27 consider them commuting expenses, which is normally a personalexpense.00;05;59;03 [Rachael]: Mm-hmm.00;05;59;12 [Jason]: Non deductible. So, that's this 50 mile rule. What, youknow, talk to me about the audit rate risk for home offices and00;06;09;25 [Rachael]: [Inaudible]00;06;10;00 [Jason]: and, you've, and you've been doing taxes for a little bit oftime.00;06;14;07 [Rachael]: Just a little while.00;06;14;13 [Jason]: So tell me a little bit about the history.00;06;16;12 [Rachael]: It's kind of high. Yeah and it's, it's almost like they canwalk in and assume you're doing something wrong because they're,they're not easy rules. And you know, maybe the square footageisn't complete or they can say, Hey, what's with the day bed andyour home office?00;06;31;02 [Jason]: Right.00;06;31;13 [Rachael]: Or, and it's not just the deductions that you're getting,your utilities, your small amount of additional square footage, butit's that commuting miles00;06;42;07 [Jason]: Right.00;06;42;15 [Rachael]: That are, it's going to be pricey00;06;43;26 [Jason]: Yeah.00;06;44;04 [Rachael]: If its not done right.00;06;45;07 [Jason]: Yeah, absolutely. So, home offices, 20 years ago were notvery common, so it was a high audit rate risk.00;06;53;19 [Rachael]: Mm-hmm.00;06;54;11 [Jason]: Today telecommuters and all that stuff is a lot higher. Butnow we're back to not being seen very often because if you're aW-2 individual working out of your home office for a company out ofCalifornia,00;07;07;05 you would have to deduct that on Form 2106.00;07;10;19 [Rachael]: Mm-hmm.00;07;11;04 [Jason]: And those expenses, those deductions are no longerallowed. So, home office is almost been shrunk down to just forbusiness owners.00;07;18;02 [Rachael]: Yeah.00;07;18;29 [Jason]: So, how are we going to do that? Joseph, talk to, talk to usabout how we're going to do the home office from an S Corpperspective.00;07;28;20 [Joseph]: So, we'll use an accountable plan for the home office forthe S Corp and one of the reasons why we do that, so you know SCorp's are cash basis, you know, and00;07;38;07 [Jason]: Typically.00;07;38;23 [Joseph]: Typically, typically.00;07;39;14 [Jason]: Yes, small businesses enjoy using cash as their method of00;07;43;18 [Joseph]: Right. Accounting, it's simple. Depending on their grossreceipts.00;07;45;18 [Jason]: Yeah.00;07;45;27 [Joseph]: And we just, we have you record it, you know, for like, likeRachael said, your interest, taxes, insurance, and then you getreimbursed by the S Corp for your business use percentage of00;07;58;00 [Jason]: Okay.00;07;58;06 [Joseph]: Business expenses.00;07;59;18 [Jason]: So, just to back up for a viewers and listeners, anaccountable plan is the method used to reimburse people,employees for business use of their personal assets.00;08;13;03 [Jason]: Car, cell phone, home, are probably the biggest ones,right?00;08;16;05 [Joseph]: Mm-hmm.00;08;16;19 [Jason]: So, and we forgot to put cell phone down on our big list ofdeductions, but we can talk about that in a second. So, the benefitto that is we're getting reimbursed by our business. That expense iskind of tucked away on the S Corp tax return, using00;08;35;29 an S Corp in your00;08;36;29 [Joseph]: Mm-hmm.00;08;37;28 [Jason]: example as occupancy expense. Not that you can't defendit, not that we're doing anything wrong, but it certainly is not as highof an audit rate as filing Form 8829.00;08;49;29 [Rachael]: Mm-hmm.00;08;50;06 [Jason]: Which is clearly the Office In Home worksheet.00;08;53;12 [Joseph]: Right.00;08;53;20 [Jason]: That gets tucked on or tacked onto your Schedule C, if youwere to have a business only on your 1040. So, that just shrinksdramatically, the audit rate risk, from home office perspective.00;09;07;06 [Joseph]: And too, S Corp's already face a lower audit ratethemselves.00;09;10;14 [Jason]: Yes, 0.4% given I think 2017 data00;09;14;28 [Joseph]: Mm-hmm, 2017, yeah.00;09;15;02 [Jason]: Is the latest that we have now. So the IRS takes forever tocompile00;09;19;03 [Joseph]: Yeah.00;09;19;11 [Jason]: This stuff. I mean, I guess it makes a little bit of sensebecause audits take time00;09;23;07 [Rachael]: Mm-hmm.00;09;23;18 [Jason]: to generate and to do. But I still like to think we can live ina real time world. You know what I mean? Like we should know likeright now how many audits are happening. So, alright, let's talkabout commuting expenses. You know, you get up in the morning,you drive to WCG Inc, you know, is00;09;45;22 that an expense you can deduct?00;09;47;09 [Rachael]: No, it's not.00;09;48;01 [Jason]: Okay. Are you bummed out about that?00;09;49;20 [Rachael]: Yes, I am.00;09;50;08 [Jason]: Yeah, okay, we should write our Senators and ourCongress people. So, okay, so commute expenses? No. Even ifyou travel far, let's say you moved to Denver and you drove everyday down in the Colorado Springs, it doesn't matter, right?00;10;03;18 [Rachael]: Still personal, yeah.00;10;03;27 [Jason]: Right, so there's no like, Hey, we recognize that you'retraveling really far, we'll give you that deduction. There's nothinglike that. So, commuting expenses, parking, tolls, all that associatedwith going to00;10;16;18 your tax home if you will, are not going to be deductible. So, great,Country Club Dues, Rachel?00;10;23;14 [Rachael]: No, can't do it.00;10;24;15 [Jason]: No! Wow! Just hammered, boom.00;10;28;06 [Rachael]: Sad, yeah.00;10;29;14 [Jason]: Talk to me a little more about that. So we have someonewho has a membership somewhere, but they do entertain, shouldn'tsay that00;10;35;07 [Rachael]: Nope. Yeah.00;10;35;11 [Joseph]: Yeah, discuss business.00;10;36;08 [Jason]: They do discuss business at their country club.00;10;40;17 [Rachael]: Mm-hmm.00;10;40;20 [Jason]: How does that work?00;10;41;29 [Rachael]: Those expenses for the country club dues are going tobe personal.00;10;46;19 [Jason]: Right.00;10;46;25 [Rachael]: It's great that they're generating business00;10;48;29 [Jason]: Yes.00;10;49;07 [Rachael]: At the country club00;10;50;14 [Jason]: Okay.00;10;50;20 [Rachael]: but the dues are not deductible.00;10;52;01 [Jason]: All right, so this same member, buys a meal. The businesspurpose is clear. They00;10;59;20 [Rachael]: Yup.00;10;59;23 [Jason]: Were there to discuss business and now this individual isbuying a meal that's going to get tacked on top of his or her dues.How's that work?00;11;07;16 [Rachael]: That meal portion is going to be 50%00;11;10;14 [Jason]: Okay. Deductible as a business meal. Just, just like we'vealways done.00;11;13;06 [Rachael]: Mm-hmm.00;11;13;09 [Jason]: With meals. Okay, great. Talk to me a little abouteducation. Can you run education expenses through yourbusiness?00;11;20;21 [Joseph]: It depends.00;11;21;20 [Jason]: It depends, ah look just the classic accountant.00;11;24;28 [Rachael]: Yeah, maybe.00;11;26;00 [Jason]: Yeah.00;11;26;14 [Joseph]: If those education expenses are to improve your currentfield, then possibly. If they're to do something completely different,you know so if I was going to go to school to become a doctor now,which probably won't happen.00;11;37;13 [Jason]: Yeah.00;11;37;23 [Joseph]: But, those won't be deductible.00;11;40;03 [Jason]: Right, so the rule is it has to improve your current workskills. And you can even do, deducted a degree or even like, youknow, college courses, even if it leads to a degree, provided it'simproving your current00;11;57;20 work skills. So, you're absolutely correct, the other half of that is ifyou need it for certifications, like your continuing educations and allthat stuff. So, people who are CPAs have to go do all these, youknow, nauseating00;12;10;15 [Rachael]: [All laugh]00;12;11;02 [Jason]: Continuing Ed credits, you know, I'm sure we learned a lottoo, but you know, anyway, so, so that's education. How about yourchildren? Can you hire your children and consider them employeesand have the company00;12;27;10 pay for the education? Who wants to take that one?00;12;31;01 [Joseph]: I would say yes.00;12;32;07 [Jason]: I'd say no. [Laughs]00;12;34;09 [Joseph]: Like, the client advocacy in me would say Yes.00;12;38;13 [Jason]: Yeah.00;12;38;20 [Joseph]: Because of the, the relation though it will be disallowed.00;12;41;15 [Jason]: Right? Yeah, I was giving you a hard time. So section 127says if your child is 20 years or younger, they have attribution toyou as Mom and Dad being an owner of the company.00;12;54;21 If you own 5% or more of the company, you can't deduct thateducation.00;13;00;01 [Jason]: But if your child legitimately works, and is 21 or older, sowe're talking junior or senior00;13;08;24 [Rachael]: In college.00;13;08;29 [Jason]: If you're on a six year plan, you're a sophomore, right?Then the company can pay up to 5,250 a year, I think that's 2019limit. So, that might get index every year, like everything else. So,anyway that's education. How about client gifts? How do youhandle that?00;13;23;16 [Rachael]: Oh, they're $25 cap.00;13;27;08 [Jason]: Ahh $25?00;13;27;14 [Rachael]: I know, its really, yep. Mm-hmm.00;13;28;29 [Joseph]: Well they give you the $4 for gift wrapping, so00;13;31;16 [Jason]: And they give you $4 per pen or something.00;13;33;09 [Joseph]: Per pen, yeah.00;13;33;11 [Rachael]: That's advertising, yes.00;13;37;02 [Jason]: So, talk to me more about the $25 rule. Is that like all giftsor, or is it just for gifts to specific people?00;13;48;14 [Rachael]: It's gifts to a limited clientele. If you were handing giftsout to the general public and it was a lower cost, then that would beconsidered advertising.00;14;00;07 [Jason]: Okay.00;14;00;14 [Rachael]: And I think they give $4 for each advertising gift.00;14;04;21 [Jason]: Yeah.00;14;04;27 [Rachael]: Which I'm not quite sure what, you know, a pen or acalendar or something like that.00;14;08;26 [Jason]: Yeah, I don't know how much stuff like that costs either,yeah.00;14;12;12 [Rachael]: But your $75 wine basket is going to be a $25 businessgift.00;14;17;29 [Jason]: Yeah, and as I've seen it, read it maybe in Journal ofAccountancy, other things like that, but that's an individual limit. Soif you don't donate, or if you don't provide that gift to an individual, ifyou just do it to the business00;14;33;01 [Rachael]: Mm-hmm.00;14;33;10 [Jason]: There might be different rules00;14;34;03 [Rachael]: Yes.00;14;34;13 [Jason]: allowing you to take more deduction. So if you say, DearBob, thanks for all the business00;14;39;27 [Rachael]: versus staff at.00;14;41;03 [Jason]: Yeah, exactly.00;14;42;19 [Rachael]: Yeah.00;14;43;06 [Jason]: yeah, exactly. So, and you can see why, you know, theIRS is always worried about transfer of wealth without taxation.00;14;50;02 [Rachael]: Mm-hmm.00;14;50;12 [Jason]: Right? So if you, if you come in there with a bunch of clientgifts for one person it might look like a transfer of wealth. So, howabout professional attire? I am rocking the WCG.00;15;00;18 [Joseph]: That's true, very nice.00;15;00;29 [Jason]: On my shirt here. But tell me about professional attire.People will constantly ask you00;15;07;09 [Rachael]: Yep.00;15;07;28 [Jason]: I have to look good in my business suit, I have to have mynails and hair done, I have to rock, I have to rock this image.00;15;15;25 [Rachael]: And they're all personal.00;15;17;27 [Jason]: Yes, even though they're dead sexy, right? Even thoughthey're very good looking.00;15;21;21 [Rachael]: And necessary00;15;22;01 [Jason]: Yes.00;15;22;14 [Rachael]: Absolutely necessary. Yeah. So there's a businesspurpose behind it, but no tax deduction.00;15;26;09 [Jason]: Right. So what's the rule?00;15;28;07 [Joseph]: If it's not suitable for everyday wear00;15;30;00 [Jason]: Yes.00;15;30;11 [Joseph]: You can deduct it.00;15;30;20 [Jason]: So, if it's, yeah, so if you can, if it's suitable for everydaywear, easily convertible into everyday wear, then it's not deductible.00;15;38;08 [Rachael]: Mm-hmm.00;15;38;25 [Jason]: Right? Business suits are, you know, clearly somethingyou can convert to everyday use. We do have some, TVpersonalities.00;15;47;10 [Joseph]: Yes.00;15;47;15 [Jason]: We do have some models, you know, and we can, we canidentify some of that attire as costumes, something that theywouldn't, you know, be caught dead in. And that's true for some ofthese models, for sure.00;16;01;26 They wear stuff and they're like, I'm never wearing that in public. Itjust, it looks good on a cover of a magazine, but that's about it.00;16;08;15 [Jason]: Those are costumes, they're not suitable for everyday use.Those are something that we can deduct. TV personalities, they'llbuy, you know, a thousand jackets and they'll give them away andso those become marketing toys00;16;20;19 [Rachael]: Yeah.00;16;20;25 [Jason]: Or ploys or whatever, so absolutely. Let's talk about, perdiem and I'll just kind of talk about this real quick. Per diems a funnything. If you own 10% or more of a corporation and, and also theremight be some00;16;38;21 attribution there, where if your brother or your sister or your Mom or00;16;42;16 [Joseph]: Spouse.00;16;43;12 [Jason]: Whatever, then you are assumed to have the same,greater than 10%. If you are in that boat, you cannot take a perdiem reimbursement. So the scenario would be like this, I'm 100%owner of a corporation. I pay myself $71 a day for every day thatI'm in San Francisco, because00;17;02;15 that's the per diem rate. Let's say using 2018 numbers, I haven'tseen them, I haven't looked at per diem in a while cause we don't,we don't see 2106 expenses anymore. But, that would not beallowed. WCG Inc says, Rachel, we need you to go to, let's sayCortez, we really00;17;18;23 didn't like you very much. I'm teasing, Cortez is lovely. But, and wesay, Hey, we're going to give you $71 per per day that you're00;17;27;08 there for meals, that would be acceptable.00;17;30;11 [Rachael]: Mm-hmm.00;17;30;13 [Jason]: Now that will not be revenue to you. You maybe only spend$20, you know, whatever. You still get to take that $71 as tax freeincome.00;17;40;24 [Jason]: So, because you don't own 10% or more of WCG Inc.That'll change, you know, you'll own, own it all and00;17;49;07 [Rachael]: Eighty-five percent like you.00;17;50;09 [Jason]: Joseph, I'll be working for you one day, it'll be awesome.So, but that's per diem, per diem is a little tricky. There is the, themeals and incidentals component. There is the lodging component.The meals and incidentals component, as far as I know and read it,is00;18;06;24 available to Schedule C, Sole Prop, single member LLC types. Theminute you're a corporation or you act with a corporation through anS Corp election that gets tossed out the window.00;18;18;06 Lodging, regardless, is always going to be actual expenses. Youdon't get the high, low seasonal rates and all that stuff that you seein those per diem tables as a business owner. So, we ran throughhome office, all kinds of good stuff there. We ran through all kindsof other deductions that we get entertained with,00;18;38;10 quite literally, cause some people are pretty clever, right?00;18;41;22 [Rachael]: Mm-hmm.00;18;41;29 [Jason]: With, with their deductions. The bottom line is, people askme all the time and they ask all of us all the time, how do I save ontaxes, right? And the first thing I say is, look, your job is to buildwealth, not save taxes.00;18;56;12 We can save taxes along the way, that's great. But your job in life isto build wealth. Now, if you still want to save taxes the trick is tolook at what cash you're already comfortable with leaving yourbody.00;19;10;24 [Jason]: So go through your checkbook and try to figure out if therewas one thing that you missed or maybe this expense really didhave a business connection to it and I forgot that it did, or to digdeep. So, it's to look at the money that you're already willing tospend and try00;19;28;06 to find a business connection.00;19;29;23 [Rachael]: Mm-hmm.00;19;30;15 [Jason]: Now, I say find a business connection, like discover abusiness connection00;19;35;18 [Rachael]: Not create one.00;19;35;27 [Jason]: Not fabricate a business connection. So anyway, those,those are some of the other business deductions that we see a lotof: commuting expenses, country club dues, education, client00;19;47;20 gifts, professional attire, per diem, all that good stuff. We talkedabout home office in this segment as well. We didn't talk about cellphones. You know, cell phones, you know, folks will try to deduct100%, right?00;20;02;16 [Joseph]: Mm-hmm.00;20;02;21 [Jason]: "I use it for my business," oh, I know you use it for yourbusiness, I see that. But the minute you get a text saying, Heyhoney, you know, you're out of beer you should probably pick somemore up on the way home; and milk and eggs are low too. Nowyour cell phone's no longer 100%.00;20;17;04 [Rachael]: Mm-hmm.00;20;18;17 [Jason]: So, you know our firm-wide soft ceiling is around 80%, ifyou're a realtor, you're probably on the phone all the time. Peoplehave kicked landlines to the curb but still your phone is going tohave a high personal use and I, I believe, we believe as a firm, 20%is00;20;37;00 about the minimum there, meaning 80% is for business.00;20;40;26 [Jason]: Maybe you're a dentist, right? And you use your cell phoneoccasionally, you do have an office phone and all those otherthings, so maybe that's like 30% business use and 70% forpersonal. So, commonly we see cell phones being paid for by thebusiness and they00;20;58;19 truly are a mixed-use asset, so a mixed-use asset should be00;21;03;06 [Joseph]: Paid by you personally00;21;04;10 [Jason]: Exactly.00;21;05;00 [Joseph]: And reimbursed to you on an accountable plan.00;21;06;04 [Jason]: Yup. So, assets that you own personally should be paid forpersonally. If there's a business connection or use of that assetthen get reimbursed. No different than you working for Google andGoogle says, Hey, you know, drive down to the store, pick up some,you know, some pencils and we'll00;21;21;15 reimburse you. Well, you bring in a receipt and you're bringing inyour mileage log, and maybe you have to use your cell phone andall that stuff, and they would cut you a check for the business use ofyour personal stuff. So, anyway those are some of the common taxdeductions that we see here at WCG.00;21;36;06 My name is Jason Watson with WCG. I'm alongside Rachel Weberand Joseph Bassett. We're at the Axe and the Oak and this is a partof our Bourbon and Business series of podcasts and videos and wethank you for joining us and we'll00;21;51;00 talk to you real soon.

Matthew 1: 18-24 - 'How Jesus Christ came to be born.' CCC Passages: - 497 (in 'Mary's Virginity') - The gospel accounts understand the virginal conception of Jesus as a divine work that surpasses all human understanding and possibility: “That which is conceived in her is of the Holy Spirit,” said the angel to Joseph about Mary his fiancée. The Church sees here the fulfillment of the divine promise given through the prophet Isaiah: “Behold, a virgin shall conceive and bear a son.”) - 333 (in 'Christ with all his angels') - They protect Jesus in his infancy, serve him in the desert, strengthen him in his agony in the garden, when he could have been saved by them from the hands of his enemies as Israel had been (abbreviated) - 437 (in 'Christ') - God called Joseph to “take Mary as your wife, for that which is conceived in her is of the Holy Spirit,” so that Jesus, “who is called Christ,” should be born of Joseph’s spouse into the messianic lineage of David (abbreviated) - 486 (in 'Who was Conceived by the Holy Spirit') - The Father’s only Son, conceived as man in the womb of the Virgin Mary, is “Christ,” that is to say, anointed by the Holy Spirit, from the beginning of his human existence, though the manifestation of this fact takes place only progressively: to the shepherds, to the magi, to John the Baptist, to the disciples (abbreviated) - 430 (in 'Jesus') - Jesus means in Hebrew: “God saves" (abbreviated) - 452 (in 'The Only Son of God') - The name Jesus means “God saves.” The child born of the Virgin Mary is called Jesus, “for he will save his people from their sins” (Mt 1:21): “there is no other name under heaven given among men by which we must be saved” (Acts 4:12). - 1507 (in 'Heal the Sick') - The risen Lord renews this mission (“In my name . . . they will lay their hands on the sick, and they will recover.” and confirms it through the signs that the Church performs by invoking his name. These signs demonstrate in a special way that Jesus is truly “God who saves.” - 1846 (in 'Mercy and Sin') - The Gospel is the revelation in Jesus Christ of God’s mercy to sinners. The angel announced to Joseph: “You shall call his name Jesus, for he will save his people from their sins" (abbreviated) - 2666 (in 'Prayer to Jesus') - But the one name that contains everything is the one that the Son of God received in his incarnation: Jesus. The divine name may not be spoken by human lips, but by assuming our humanity The Word of God hands it over to us and we can invoke it: “Jesus,” “YHWH saves" (abbreviated) - 2812 (in 'Hallowed be Thy Name') - Finally, in Jesus the name of the Holy God is revealed and given to us, in the flesh, as Savior, revealed by what he is, by his word, and by his sacrifice (abbreviated) - 744 (in 'The Spirit & the Church in the Last Days') - In the fullness of time the Holy Spirit completes in Mary all the preparations for Christ’s coming among the People of God. By the action of the Holy Spirit in her, the Father gives the world Emmanuel, “Godwith-us” (Mt 1:23). --- Send in a voice message: https://anchor.fm/daily-gospel-exegesis/message

Matthew 1: 18-24 - 'How Jesus Christ came to be born.' CCC Passages: - 497 (in 'Mary's Virginity') - The gospel accounts understand the virginal conception of Jesus as a divine work that surpasses all human understanding and possibility: “That which is conceived in her is of the Holy Spirit,” said the angel to Joseph about Mary his fiancée. The Church sees here the fulfillment of the divine promise given through the prophet Isaiah: “Behold, a virgin shall conceive and bear a son.”) - 333 (in 'Christ with all his angels') - They protect Jesus in his infancy, serve him in the desert, strengthen him in his agony in the garden, when he could have been saved by them from the hands of his enemies as Israel had been (abbreviated) - 437 (in 'Christ') - God called Joseph to “take Mary as your wife, for that which is conceived in her is of the Holy Spirit,” so that Jesus, “who is called Christ,” should be born of Joseph’s spouse into the messianic lineage of David (abbreviated) - 486 (in 'Who was Conceived by the Holy Spirit') - The Father’s only Son, conceived as man in the womb of the Virgin Mary, is “Christ,” that is to say, anointed by the Holy Spirit, from the beginning of his human existence, though the manifestation of this fact takes place only progressively: to the shepherds, to the magi, to John the Baptist, to the disciples (abbreviated) - 430 (in 'Jesus') - Jesus means in Hebrew: “God saves" (abbreviated) - 452 (in 'The Only Son of God') - The name Jesus means “God saves.” The child born of the Virgin Mary is called Jesus, “for he will save his people from their sins” (Mt 1:21): “there is no other name under heaven given among men by which we must be saved” (Acts 4:12). - 1507 (in 'Heal the Sick') - The risen Lord renews this mission (“In my name . . . they will lay their hands on the sick, and they will recover.” and confirms it through the signs that the Church performs by invoking his name. These signs demonstrate in a special way that Jesus is truly “God who saves.” - 1846 (in 'Mercy and Sin') - The Gospel is the revelation in Jesus Christ of God’s mercy to sinners. The angel announced to Joseph: “You shall call his name Jesus, for he will save his people from their sins" (abbreviated) - 2666 (in 'Prayer to Jesus') - But the one name that contains everything is the one that the Son of God received in his incarnation: Jesus. The divine name may not be spoken by human lips, but by assuming our humanity The Word of God hands it over to us and we can invoke it: “Jesus,” “YHWH saves" (abbreviated) - 2812 (in 'Hallowed be Thy Name') - Finally, in Jesus the name of the Holy God is revealed and given to us, in the flesh, as Savior, revealed by what he is, by his word, and by his sacrifice (abbreviated) - 744 (in 'The Spirit & the Church in the Last Days') - In the fullness of time the Holy Spirit completes in Mary all the preparations for Christ’s coming among the People of God. By the action of the Holy Spirit in her, the Father gives the world Emmanuel, “Godwith-us” (Mt 1:23). --- Send in a voice message: https://anchor.fm/daily-gospel-exegesis/message

Selling a British company to a US entity is complicated to say the least. From this experience, we have learned that it is doable and an eye-opening experience from both the seller and the buyer side. There are opportunities out there, and with some perseverance, great returns on both ends of the deal. Today's guest, Joseph Harwood, a London based entrepreneur, was behind one of the most complex transactions we've dealt with in twelve years of brokering. Despite the challenges of selling an overseas company, we managed to help create an advantageous deal structure for both the buyer and the seller. Episode Highlights: What the tax situation looks like for a UK seller looking to sell to a buyer in another country. Types of transaction structures available to these sellers. The number one objection coming from the buyer side. How Joseph was able to see through the obstacles. What the process was like from the outset. The advantages of listing with an earnout. If and when doubt crept in for Joseph. The seller tax break on built-up cash flow on a transaction like this. Why this approach means that buyers have choices and a comfortable pace. Things that a UK based seller should consider for selling abroad. Transcription: Joe: Mark one of the great things about Quiet Light and the team that we have is we're always communicating in the background; helping each other out, asking questions, sharing information. And more recently we're seeing a lot of communication about the sale of UK based or European based Amazon seller accounts and the transfer of i. And I understand that you just took one on. I did a few years ago. Actually, there's usually a small component of most transactions that I do if it's FBA that there's a European run that 100% German seller account last year. We're always doing them and they're always different. Our buyers get a little bit concerned about buying one. And our sellers get a little bit concerned about the transferability of one. But you just took on a very complicated one. You've managed to do the transfer. It ended up being a stock sale and there was some definitive advantages to both the buyer and the seller in making this happen. Can you tell us a little bit about what this podcast is about and how you talked about the owner of the business there? Mark: Yeah. So the owner of the business is Joseph Harwood. He agreed to come on very graciously. I'm super happy he came on because in 12 years of selling online businesses this was easily the most complex transaction I've done. There was a moment where we had a sell-side conference call only; so only the advisors on the sell-side and I was the last person to join and the prompt at the beginning of the call said you are the 12th caller on this call. And I'm thinking 12 people on this call on the sell-side only to advise this transaction. Now you may be hearing the something and that's why I don't do a UK deal because it's complex. But here's the thing, throughout this process not only did we take what was a fairly complex business in terms of its operations we took a UK company which has some tax disadvantages being sold in the US and we managed to make a structure that worked out well for the buyer and worked out well for the seller. In fact, there are structures available which can be tax advantageous for both the significant degree. And our buyer in this case; God bless him, a great person, a great buyer, had the perfect mindset for this which was to not try and adjust this large transaction all at once. And everybody in the team did the same thing by the way just to address each problem step by step and the result of this is that he got a great deal and a great company that is growing like absolute bonkers that not a lot of people were looking at. And for him to look here and not rule this out based off the UK domicile only is a testament to him and I think will pay off pretty handsomely for him. On the UK side I know we talked to a lot of UK sellers that think that they can't sell a business and listen it's more difficult. We're not going to cast aspersions here and say that it's somehow easy to do. A lot of people do avoid UK based businesses but it is possible. It needs be structured right. We need to attack it correctly. And for those of you out there looking to buy if you can figure out this UK angle and it is something that can be figured out. We do have a template for it. It's a really good opportunity because there's some great businesses out there that aren't going to market right now for the very reason that those sellers don't think they can. Joe: I would say it's almost the unavoidable future, right? A long time ago we talked about can you even sell an Amazon-based business. Well, here we are millions and millions and millions of them sold. Now it's those businesses all have; a lot of them have a UK component to them and some are standalone UK businesses or really European businesses. It could be any country over there. So I think it's the future. I think it's important for both buyers and sellers to understand it. And I'm really excited to listen to this one myself and hear your most complicated transaction in 12 years come to a final close and successful transaction for both the buyer and seller. Mark: Alright Joseph thank you so much for agreeing to come on the podcast. For those of you who didn't pick us up in the intro and I'm sure Joe and I talked about this but Joseph you and I recently worked together along with Scott Dietz from Northbound to help sell your business. And I'm really happy to have you on because we love bringing on previous clients. Joseph: Yeah, glad to be here Mark and hopefully, I can still shine some light on a possible sale of UK Limited Companies to US buyers. Mark: Yeah and that's one of the things that I definitely want to talk about on this and just have a conversation with you. I know within Quiet Light Brokerage we have this conversation quite a bit and then I would imagine among UK sellers, it's probably met with some skepticism; the idea that you could even sell a UK business, e-commerce business primarily because of the tax situation. Could you just go over that for somebody who might not be familiar with what does a tax situation look like for UK seller who's considering selling their business? Joseph: Yeah so basically the big fear is doing an asset deal and then having to take your funds as income which is then transferred into a person's assets which is taxed heavily. If you get over; run about 100k threshold that's about 45% so doing an asset deal is technically really, really bad for you. So generally most sellers want to do a seller shares deal and then you get a 10% tax co entrepreneurs relief which is taxed personally up to; you have an allowance of 10 million in that and that's a 10% tax. So it's a pretty significant difference tax-wise depending on what kind of deal you can get. Mark: Yeah and I think buyers or sellers tend to be skeptical that they can do this. And this isn't just with the UK. I know Canada has something very similar. Australia has a similar structure as well where a share sale you get a pretty awesome tax rate. And then if you're doing an asset sale you're going to get absolutely killed with the tax rate. The buyers don't generally want to do a stock sale and brokers like myself I know when you and Scott first approached me I think that was one of the first things I told you. Like wow, I don't know about a stock deal. I can't offer something as a stock deal that's rule number one. And rule number two a buyer is looking at it; I don't know what would you guess would be the number one objection for buyers? I would say probably the liability carrying forward. Joseph: I think structuring wise it's complex because you're buying an entity and you're in a different country. So I think that in itself can scare a few people. It's a bit more of a learning curve. Mark: How many; let's count how many advisors we had on your team. So just on the sell-side, we had Scott Dietz, myself. Joseph: Yeah we'd retained Redpath US tax advisors who had retained a UK council. Mark: Oh so we have a UK council as well. Joseph: Well yeah they had a UK council retained within them. So that was kind of tax advice UK, US. And then we had a UK contract advisor and then our US contract advisor. So technically 4 different retentions of legal advice which ended up in quite a hefty bill I think it's a good learning process for the book. Mark: The thing is you can absorb that hefty bill. We're not going to discuss how much you sold your business for. I mean it was in the seven figures range. It was a good size. When you're talking about the difference between a 45% tax paying for advisors I mean it's worth it. But it did get complex in that there was just a lot of voices that were being heard with every single document that got shared. And I was just on the sell-side. We had Rochelle Locke who's been on our podcast advising the buy-side and they had their own people as well that were advising on the tax structure and everything else. There was a lot of advisors there so it was a bit more complex but I think part of that was because we hadn't done this before. Joseph: Yeah I mean I'm going to say it was a big learning curve for everyone involved. We were lucky to have a patient buyer who was determined to see the deal through to the end. And I think we from my experience have learned a lot about selling a UK company to a US entity. Yeah, it's a complicated process but looking back at it now the tax piece of the puzzle is; I mean okay every situation business is unique but there will be no way we would need to have as many detailed conversations because we're kind of aware of what issues can crop up tax-wise the permanent establishment thing and where the business is run from and those kind of things are more solvable. Now we're sort of prepared and then contract wise like I don't actually think we needed to retain a UK council until the buy-side presented documentation for it. And then we would have had the UK council review; the UK law side documents but I think Sean from E-commerce Small group would have been fine for just reviewing the actual SBA agreement. Yeah like it could have been simplified down but it was still in itself like a valuable process to learn. And there was so many great things about the tax side that sort of gleaned from that process. I think it was worth it. Mark: Yeah. I want to get into that in a little bit because one of the eye-opening things with your transaction was the number of tax advantages that you personally had as a seller and also the tax advantages that we were able to potentially introduce into the buy-side of the equation. And for those that are listening that are looking for acquisitions, there's actually an opportunity here which we basically uncovered to look at UK based businesses and save significant money in a number of ways. Before we get into I want to back up a little bit and just talk about what it was like when you first came on with Quiet Light Brokerage. Because I remember when Scott who you hired a while ago to help advise and again Scott's a great guy. He's super good at advising. He caught me at a conference in Austin and said hey Mark I got this great business for you. And then he went into a little bit of what it was and like I don't know Scott I don't know about the future. And then he said well we really believe this is going to be good and there's all sorts of reasons that we think; I mean not think but we know this business is going to grow by this much. And by the way, it's a UK company and I'm just thinking Scott come on. Joseph: Every step of the conversation it gets a little bit harder doesn't it? Mark: Right. And so the first time that I talked to you Scott and I were also at a conference and so I got up early; I think I was in Las Vegas, my whole mindset was okay I've got to get this guy's expectations set early on. I will take this on but this is going to be really, really difficult to do. And I'm glad though that you saw through all that because it did turn out to be a really eye-opening sort of exercise. But what was that initial upfront process like? I know you listed a business before for sale. What was it like going through that process with Quiet Light? Joseph: It was great. The first brokerage that I've worked with has gone to so much detail to answer so many potential objections from a buyer. I mean I'm surprised we got any no's after that the depth on our information pack and the seller interview. I mean the length you guys went to take to understand potential objections and understand the business as well; the risks involved and kind of highlighting it, picking up on the upsides, and really like understanding what I was doing with my company and the niche I'm in. I think that was a huge part of getting a buyer to the table who was ready to take on the risk that was over there. It's a Q4 niche. It's a very risky prospect. And I think the buyer saw the risk and the upside and was able to make an educated decision because of the information that had been put together. I'm not going to lie, it got to the point where it was slightly frustrating and we were having our firstborn son at the time. We intended to be listed and sold before that happened. We ended up a bit further behind than we actually wanted it to be. But in the end, it was right so we got a deal done. So that's all that really matters. Mark: Yeah and the good news is we beat your son crawling, right? He's not crawling yet. Joseph: Yeah exactly. Mark: Okay, so we got the business sold before he was crawling. Joseph: We got that. Mark: That upfront process was difficult but the lesson that I took away from that portion; your business was unique in a lot of ways like you said it was a fourth-quarter sort of product. And look a lot of Amazon products a lot of Amazon businesses are fourth quarter heavy but yours really relied on that fourth-quarter more so. And just to put this in context for people listening, the growth trajectory that we were seeing on your business was really, really significant. And some of the things we are anticipating we're pretty aggressive. And so that all came in this sort of short period and so there is this element of perceived risk. So the lesson I took away from this that was so good and again Scott did a great job with this was figuring out a structure that got you, Joseph, a good amount of money at close where it wasn't going to be a complete miss if things fell apart but also allowed you to ride some risk with the buyer and let them really cash in on the upside of that without risking all of the money on it. And so deal structuring to answer objections I think is really if I could summarize it. Joseph: Yeah. I really totally agree. And I think of brokerage firms just have this kind of cookie-cutter response to how they want a less to do it; it's 3x, it's 4x because of blah, blah, and blah. We listed with an earn-out and I think that one pulled a high multiple but two I think you already reassured buyer that we believed our projections and they weren't just pulled out of thin air and to kind of like; you know like we were really willing to go on that journey with you. And I think yeah that really helped. Mark: Yeah, I think so too. And a lot of people in your shoes don't want to do an earn-out because especially when it's first proposed you think I don't know who's going to buy the company. Like how can I trust them? First of all, A. complete credit to you to understanding the upside for you as well with an earn-out where you can tap into some of the future growth of the business. But then B. you're involved in this process all the way through and you saw the importance of knowing who your buyer was and being able to trust that buyer to be able to grow the business and be confident. We've got a fantastic buyer. Like you said he was great through the whole process and I think he's going to kill it with the business. Joseph: I don't think it would've been as easy to move forward if I wasn't as confident with the buyer. If it was a private equity group then I would have put the company in hands of someone who might not know how to manage an Amazon business effectively or specifically this kind of Amazon business. I think that because of this seasonality and SKU density I think it takes a kind of special approach to run a business and I think our buyer has that. So yeah I mean it's definitely important. Mark: Yeah. On the flip side and I don't want to speak for the buyer. I'm hoping to get him on the podcast. He's agreed but he's obviously busy with a new business. Joseph: He's pretty busy. Mark: So I totally get that but from his perspective where he's really, really smart is not only did he buy a business with some really strong forecasted growth, he bought a business where a lot of other buyers weren't even looking because they just discounted it saying UK, I'm not interested. And so it gave him some advantage as far as that. And look let's be honest it took a little bit more effort for us to find a buyer. We had a number of conference calls and nothing materialized. At the end of the day, we had a couple of good qualified buyers that were kind of competing but it took a bit for us to get there. Was her point; I'll answer this after you do, but was there a point along the way where you thought that this isn't happening? Joseph: You know, to be honest. I think at the start I felt like it wasn't happening the right way because a lot of the buyers that we're getting on calls were trying to keep me pretty significantly involved in the company and structuring their offer so they're otherwise around me to having salary or retained in a large amount of equity unless upfront cash. So it's a bit like maybe there's too much value in me and not what the company is actually doing and I'm so this unique entity. But eventually, with some of the other offers we received, we started to see some buyers really saying the value in the business too. Yeah I mean overall I don't know; I don't think at any point during the process I was particularly worried that it wasn't going to happen. I think there's always a buyer out there for what you're selling if you know what I mean. Like it's just what I was selling was a very specific thing that required someone who was willing to take a pretty significant amount of risk. And yeah we found that person. Mark: Yeah, and then again the offset to that risk for him is the upside on this, right? Joseph: Yeah. Mark: The upside is getting significant. And look there is value in you but I think from a buyer's standpoint when I look at how that dynamic worked out; I mean you were pretty vocal upfront saying I don't want to be working in this business moving forward long term just because you have other interests. You have a newborn son. You want to spend time with that son and that's totally reasonable. All the same, you are going to be doing some work with the business here moving forward mainly because you and this buyer get along wonderfully. And so he's accomplishing what other people we're trying to wrap up early on by really just having a good relationship with you which again is just as; we preach about this all the time, right? If you want to be a good buyer and be successful be likable. Joseph: Yeah I mean honestly I was a bit concerned because the buyer and I was sharing a lot of information about the business before close and in the end I just discounted that nagging thought in the back of my head to should I trust this person, are we actually going to close, are they just trying to gather information and then pull out or whatever and try and compete and yeah, I just put my trust in and the buyer and I think that really paid off. Mark: It's easier to trust a buyer when you see that they're spending a lot of money as well on their side with advisors, right? Joseph: Yeah exactly. Mark: That would have been an expensive fact-finding mission for him. Let's talk a little bit about some of the tax advantages. I mean we've already talked about just the advantage of the 45% to 10% on your side. But something you brought up; you came up, by the way, for people we didn't say this before but you came out and actually visited me here in the Twin Cities as well as Scott who lives in the Twin Cities. We had dinner. It was great. It was along with Eric as well from Redpath. The first time a client has come up and visited. It's fantastic; a lot of fun. But one thing you brought up in that conversation was the tax savings that you were able to generate as well on the money with; the cash within the business which is one of his kind of hidden benefits that maybe we weren't anticipating early on. Joseph: Yeah. I mean I kind of knew it existed as an option but because moving into the process I wasn't 100% sure if we would actually get a seller's stocks deal; I knew that was a big driver so something we were pushing forward but I'm… yeah, so basically to summarize the working capital and inventory within the company can also be released tax efficient during the earn-out because it's counted as working capital. So basically you sell the cash of the company and the inventory to the buyer and they then cycle that back to you. I mean you can do it as quickly as 10 days. We're allowed longer so we've got time to kind of work out the accounting side but they effectively buy the cash and you're giving it back at the entrepreneur's rate so the 10%. So instead of having to [inaudible 00:21:53.3] to take that money as salary or income and dividend, you can pull out the business into a personal through entrepreneur's relief at 10% which is a nice benefit and something that for anyone at sell-side you should really be considering the year before you sell your business you want to be building your cash reserves because you can pull that money out extremely tax-efficient right. Mark: In your case, it was; I won't put a number to it but there was a significant savings probably taking a large chunk if not the entire chunk of some of your advisors that you were paying to help us. Joseph: Yeah Mark, for sure [inaudible 00:22:30.6]. Mark: And so yeah we take a look at that; again the path that you sort of blazed here for a lot of other UK sellers with all these advisors, we have a pretty nice path down. I want to just touch briefly on some of the tax savings that we saw on the buy-side. Are you familiar with much of that or shall we pass over that? Joseph: I mean I think it's important. I don't totally understand the details; very, very top-level view. I know there's structuring that you can do with different entities in a holding company that achieves an effective tax rate of 21% then they sort of; a tweak of that is if you then pull all the company activities into the USA you don't have a person in the UK, the UK office, or whatever country you end up running the business in you don't have what's called permanent establishment in that country. So then the effective tax rate ends up being at 26%. So again it's still not bad like the flow-through tax rate of an LLC is 37, right? So, whatever happens, it's an effective way to use the dual tax treaty between the UK and the US and same with some other countries like Canada and Australia like some that you said before but yeah when it comes to the actual structuring that's more for a tax advisor to kind of discuss but yeah like it's one of these things. So once you get past the liability which can be solved contractually it presents a huge opportunity for both buyer and seller which is I think an important thing to have those conversations about because it's not just the seller that benefits from effective tax rates. Mark: That's right. So just to kind of recap here what we're talking about here is going from an effect of 37% here in the US. When we think about buying an Amazon business we typically look at just straight-up asset sale, you set up a new LLC and then you're going to have your earnings on that business tax at that 37%. Under this structure, it would require a different sort of setup with these companies and one could do with the details in that meeting because I don't want to get something wrong here on this episode. I hope to have Eric from Redpath on who can discuss this in more detail. But effectively going from that 37% like you said down to an effective rate of what was it 25%? Joseph: 21 or 26 depending on which country the operations are run out of. Mark: Right. And so that can be significant savings if you are seeing earnings well into the six figures. And in addition to that having that structure set up so if you were to say as a buying group I want to buy in the UK because let's face it there's a lot of U.K. companies that are really, really powerful and doing some amazing things. You now have a vehicle within UK to be able to acquire some of these properties and save on the tax rate as well. It's a double bonus there. My opinion from the buy-side it requires a little bit of setup but the benefits are definitely there long term. Joseph: I think it's one of the cool things that we sourced towards the dinner we had was not many other buyers are looking at these companies. And I think that gives the buy-side another competitive advantage. It's like some of the other larger brokerage firms they're not looking at UK companies. I remember having some initial contact conversations with my broker and the second we mentioned it was a UK company they basically took a 0.5 multiple off the company because they were like yeah we don't do that, we don't do stock, we don't do you know. And I think that approach to UK companies means that there's more of them available. Mark: Yeah. With a US-based company, we have this tendency where if you don't move quickly as a buyer and by quickly I mean days you're going to lose it and with a UK company often. And it didn't happen in your case actually when we actually got down to that LOI stage things did move rather rapidly. But there was luxury for some of the earlier buyers to basically take their time because they didn't have; normally we have a dozen or more people looking to have the property. In this case, we had less than that looking at this closely enough or for some competitive pressure. But I think that was crazy. And I think the pace was a bit more comfortable. What do you say; let's flip around a little bit here and kind of round out with this, there's a lot of UK sellers out there that may be looking at this and saying I've never really considered selling my company. Some of the things that you would recommend you've already mentioned building up some savings in your account before going to market. So that you can pull that out as a favorable tax rate but what else would you mention to UK based sellers that maybe haven't considered this before. Joseph: Yeah, sure. I mean I'm not sure what advice I have specifically for UK sellers. I have some good general seller advice like have your numbers in order, know your inventory values, have inventory management software if possible so you can pull inventory numbers at any given time, know your way around your balance sheets like having numbers over to a buyer as quickly as possible helps them be informed and helps you get the deal closed. I think that's fundamental you don't want to be waiting for your accountant to get this information. I mean for UK buyers I don't think I have any really specific advice or any more detail but like the buyers are out there. There are interested parties willing to look at structuring options and get deals done. I think it's an exciting time for UK companies which is not; there are options out there to get closes that are tax favorable for a UK company. Mark: Yeah, I would agree 100%. Again it's a bit of an eye-opening experience for me as far as just what we can do and where we take a look at the deal, structure it smartly from the beginning. I think the other lesson that I did pull away from this was just the benefit in bringing on good advisors. I know both on the buy-side and sell-side I see people hesitate sometimes. Maybe their books are a mess and so we recommend that they hire a bookkeeper. We have a number that we recommend that just do good work and sometimes people they balk at that. I don't want to spend 3 or $4,000 but the benefit you get out of hiring a good adviser I mean it pays for; it should pay for itself. It should pay for itself. Well, this is great Joseph. I know that there are going to be people out there who have questions about this. Are you open to having some of them contact you by email? Joseph: Yes for sure I'm happy. Anyone who wants to talk to me either buy or sell-side I'm probably not going to give you any detailed information in structures that I don't truly understand but yeah happy to sort of field any questions that this might bring up. Mark: Okay well, we will place some contact information for you in the show notes to this episode so I'll get that from you. I really appreciate you coming on here and taking the time to talk about the deal. I know it's not always comfortable talking about the deal that you've just closed because most of us let's face it we're introverts. Joseph: Yeah. I should be on holiday now really anyway. Mark: You should be instead you're still doing all this stuff. Hey, thank you for coming on. I appreciate you sharing your story with us. Thanks for trusting us to do the deal and most importantly as much stress as it was also just a ton of fun. Joseph: Yeah I mean I was generally enthused by the process. I really enjoyed the negotiating and closing and selling a company. It's the first time I've ever done so yeah pretty exciting. Mark: I can't wait for the next one. Joseph: Yeah me too. Mark: Sounds good. Thanks, Joseph. Joseph: Alright, thanks, Mark.   Links and Resources:

Title: Live in Dallas, Invest in Lubbock and When to fire your Property management Company with Joseph Gozlan James: Hi Audience. Welcome to Achieve Wealth Podcast where we talk about value-add commercial real estate. Today I have Joseph Gozlan from Dallas, Texas. Joseph run's the record business group, which is a brokerage firm and also a sponsor of 500 units in Lubbock. And now let's welcome Joseph; and why not just have you tell about yourself?   Joseph: Awesome. Thank you. James. It's an honor to be on your podcast, I love everything you do. We're in the same mastermind, so it's an honor to be here.   James: Sure, absolutely. So, yeah, I mean, we like to talk details, right? There's no fluff here and there's no marketing as well. So let's go deep down into details about how you run your operation between being a broker, at the same time being a sponsor where you syndicate deal. So can you tell me how you split your roles there?   Joseph: Yeah, so it's actually very complimentary and it brings value to everybody in the transactions. So when we work with our acquisition groups, we have access to the tools that most sponsors don't have. We have access to Yardi matrix that gives us information about properties, comps, sales, rents and loans that are on the property that really give us access to information that is beyond what most sponsors have. And if a sponsor wants to get comps on the area, he either depends on whatever the broker provides him or they have to go out and shop those properties themselves.  So we have all that advantage of talking to other people in the industry, talking to other workers and really understanding the market better than most out there. So that's really the value that we can bring to our investors. On the other hand, we also bring a lot of value to our customers because unlike working with a 25-year-old kid for Marcus and Millichap or CVRE, we actually know what we're doing, we actually own those properties. We operate the properties so we can really get our clients through everything they need help with so if they need us to extend our lenders connections or insurance agents or so on, we can help that. We can help them calm down when Fanny Mae drives them crazy and tell them that's normal, that's just how Fannie Mae works. And that's not to say that there are no veteran agents at Marcus and Millichap or CVRE that don't know what they're doing, they definitely have some superior people over there that are more capable than most agents there.  But for the most part, if you're a new sponsor, you'll be working with the lower level agents in the agencies there. For sellers, what we can help with is because we have the operations experience, we can come in and take a look at the financials, take a look at the operations and offer tweaks here and there to their operations to help them really maximize their NOI, which as you know, maximizes the property value, the price we can sell. And I can give examples if you want.   James: Sure, sure. I mean, before we go there, I want to touch on one thing because you can see the seller's mind right? I mean, I've not sold one property yet so, I don't know how the mindset is going to be, but you work with a lot of sellers, right? So tell me why sellers sell?   Joseph: Oh, there's a lot of reasons. All the way from syndication groups that have completed the renovation plan, extracted the value that they were planning to and they're ready to sell just like they promised their investors two, three years later. And on the very far end of that spectrum, you have the older ownership that, and I see that and I cringe a little bit every time, but their kids want nothing to do with apartments. And that is just sad to see a 70 80-year-old person that worked so hard all his life to build a portfolio and now instead of being happy to build that generational wealth and to hand it over to the kids, they want nothing of it so they're forced to sell. So it's everywhere in between, but usually it's either a completion of a pre-planned execution plan or the kids don't want it. I got to get rid of it. Sometimes we come across distressed owners that went into something that was just not ready for and they want out. That happens too.   James: Okay. I mean, we had like nine years of expansion run right now, right? So the dynamic of buyers and sellers has changed. So, people who bought it in 2010, they have made a lot of money up to now, I mean, in terms of equity, they are brought up a lot of equity and they would have sold it somewhere 2013 or 2015. But there's a lot of people who are jumping in right now late in the game, as a buyer. And what do you think, they need to be watching here right now because we had one of the longest expansion markets right now.   Joseph: Yeah. So here's the thing, everybody that bought in 2010 and sold in 2015 regret it now because people that were in 2015 are selling now in 2019 and they still made a lot more money. So nobody has a crystal ball, we don't know where it's going. We don't know if it's going to end in six months so it's going to take another six years until we see a difference. Personally, I believe we are about 18 to 24 months away from seeing quite a few properties go on a distress sale but I don't think it has anything to do the way the market is going to behave. So we kind of reach to a place where the market is no longer steeping up and just a crazy incline, we're getting into a place where it's a plateau or maybe a little bit of a downturn in some of the markets in the country, but for the most part it just plateaus or creeping up a little bit in other markets.  But that's not going to be enough if people made a mistake buying. So I always say about multifamily, you make your money when you buy, but you lose your money on operations and who better than you know how critical operation efficiency is, right? Then I see a lot of sponsors out there that are not very good operators and I think that is going to cost them the property in the long run if they don't pay attention to the details and they don't really follow everything that happens on the property.    James: Got It. So I talk a lot about operators in my book, Passive Investing in Commercial Real Estate because I think they are the backbone of the success of a deal. Can you define an operator?   Joseph: Yes. Anybody that is involved in the day to day of the properties. If that person is not talking to the property managers, is not talking to the supervisor, is not talking to the owners of the property management or the VPs that are assigned to these accounts and just hands over the keys and forget about it, it's not gonna work. Because at the end of the day, and this is kind of like a little bit of a joke in this business where we buy 5 10 $20 million properties but we hand over the keys to people that have 50 $60,000 pay grade and they are phenomenal people at what they do but they still don't have the capacity or the business knowledge to make decisions for $20 million properties. So each level in the chain has their own decision rights and obviously, I don't make a decision of who is going to fix the faucet in J7 or is it more critical to do that faucet versus the plumbing in K9? This is a decision that happens on the property level. There are decision levels with the regional supervisor and then there are decision levels at the property management level company, the corporate office and there are certain decisions that we keep to ourselves like brand, right? If it has our name on it, it better run through us. It doesn't matter if it's a website or a flyer or advertising somewhere, we're going to make sure we control our brand so this is a decision that stays within our control. We also work with partnerships. We don't just come from all the way up top and we drop it down heel to the people on the property. We listened to our property managers, we get ideas from them, we work together to encourage them to be more than just order takers.   James: Got it. Yeah. Some asset manager, they want to be a sponsor, but actually, they tried to do more passive investor, where they give the keys to the third party property management and they hope that things will run well. I mean, market could have helped a lot of people in the past nine years, because market is booming even though you make mistakes, even though you did not do well as an operator or you have no clue of a multifamily operation, you would have still made like 100%, I don't know how many percent, but he could have made at least a minimum 50% right? If you bought it in 2015 and sell now a minimum of 50%  but I think that's a market, right? As an operator, you would have increased the value a lot more if you're a really good operator. So can you define why or can you let us know why did you go to Lubbock when you're living in Dallas, which is one of the hottest markets in the country?   Joseph: Well, we got priced out of the market, honestly. There's a lot of education groups that that push bids up. There is a lot of foreign money that came in. You've got to look at it from this perspective; everybody has their own strategy. Everybody has their own set of investors and those investors have their own expectations for returns. So, I'll give a few examples, right? The Japanese for investors, there's a tax law back home that if they buy anything in the states that is over 20 something years old, they get to accelerate depreciation and write it off in about three, four years. They don't need to make money, it's a write off for them. Their strategy is a tax write off so they can out beat us at any given point. If your strategy is working with foreign investors, we both know another syndicator that works with foreign German investors and he says that they're thrilled to get 5% returns. If that's the money he needs to pay his investors, if that's the returns he's got to achieve, he can overpay what we can afford because our investors expect more. So that's what I'm saying is you got to look at it. It's not just foreign investors, it's also family offices, it's also institutional money that came in and all these groups are looking for core markets. Dallas, Austin, Houston, LA in New York, Miami and Atlanta, Georgia. That's the kind of markets that they know. So we just got out priced from the market so we went out and went to the secondary markets in Texas.   James: Yeah. I think it's strange. Sometimes we see a deal is expensive but it could be just, it's expensive for you. Your investor base thinks that your returns are too low but there could be another investor base who is okay with that deal and they may get a benefit from other factors like tax benefits, which is for them is a great deal at this market. So yeah, there's no expensive deals, it's just who's your investment base, I guess. If you have Japanese as the investor base and maybe we can buy, the priciest deal in town and still make everybody happy. Joseph: I've seen them buy [12:18unintelligible] so yeah, you're absolutely right. If you're a 10 31 money and you're backed against the wall with the clock running down against you, you're looking at it and say, okay, all of that loss of potential taxes is my income now because I'm going to be able to recover that instead of paying that. So there's a lot of reasoning behind people's strategy and I learned not to judge somebody for [quote-unquote] over-paying without knowing what the background and where the funds are and what's the alternative they had.   James: Got It. Yeah. I think the biggest problem we see is over-beating when people over-beat on a deal, that's where you're paying the highest price whether you know or not, you may have won the deal, but you actually lost the war.   Joseph: Well, and that's where the smaller boutique shops like ours are a little bit better to work with as a sponsor because if you go to bid on a Marcus and Millichap deal or CVRE deal or JLLHFF, any one of the big brokers, they have hundreds of thousands of people in their distribution lists so you will be bidding against a lot of people.  Small brokers like us, we don't have a database that large; I wish I had, but we don't. So then the circulation of the properties that we have on our marketing is much smaller than the ones that the Marcus and Millichap guys have. And as part of that, we've learned to build a network of smaller brokers that we call broker with. So when you approach someone like me and there are quite a few small firms out there that are doing the same thing, not only that you get access to my less circulated listings, but I can also get you access to somebody else' less circulated listings that you wouldn't have been able to access because you don't know that small broker. James: Yeah. So let me ask you, I mean, you are a broker and we go to your role as an investor because it's interesting to talk to a broker, I've not talked to a broker on this podcast yet. So how does broker market deals in this hot market? Obviously, you're going to get a deal, we should think is a good deal; there are two types of deals, one is a deal that you think a lot of people will want to jump on it and there's another deal which you think is a bit pricey that are sellers testing the water right now, right? They want to check out how much they can get in terms of price. So let's say the first scenario where they are, it's a good deal and how would you go about marketing that deal?    Joseph: Yeah. So we try not to work with sellers that are completely delusional. If the property is worth $2 million and they're asking for 4, my chances of getting them a buyer is zero. I can't afford to spend all that time on a property I know I can't sell. So we have honest conversations with our sellers about what's realistic and what's optimistic and what's unreasonable. So we'll work with them on this and we will not take owners that are just unreasonable so that's just to address the types that you mentioned.  The way we get our listings out is when we get a listing, we first make a few phone calls and those few phone calls are to the buyers that have closed a deal with us, it's for the buyers that we know are capable of closing, the buyers that are, in our opinion, ready to pull the trigger and the most qualified buyers. And if we can get that property sold within those few phone calls, then that's great. If not, then we'll expand the phone call circle and then we'll send an email to a smaller group of investor, then a bigger email to a larger group of our investors and it's basically like a growing ripple in a lake. When you throw that stone first, there's a small circle, then there is a larger and larger all the way up until if we have no choice, we'll get it all the way out to those websites out there that are doing listings for apartments and so on. So we'll start small and we'll grow as we need.    James: Okay. Yeah, that's my theory in terms of off-market because usually, the brokers will try to sell within the people that they know because it's a multi-million dollar deal and brokers have the fiduciary responsibility to sell it as soon as possible to the seller, to the right qualified buyer.   Joseph: It depends on the seller. If you go to one of the big brokerages out there, then you are willingly putting the property into the blender. They will have 30 40 tours and they will have a lot of people interested and there is going to be a call for offers in maybe two of those and then there's going to be a best and final round so it'll take about four to six months of just a lot of disruption to the property. At the end of it, you might get a contract that will go through, you might fall for the first one and go to the second one, but eventually, they'll get it sold and they're probably going to get a top possible dollar for that property but in that time, that property went through the blender.  The way we operate and what we offer our sellers is a quiet, smoother transaction without disrupting the property with qualified buyer. Part of what we do, our responsibility to the seller is to qualify the buyer. And if it's not a qualified buyer, we're not going to get him on the property, we're not going to disrupt the property and we're not going to let him lock in on the contract.   James: Yeah, I mean, just to give a story, I had a guy who was a Newbie called me like two days ago. He said, "James, I found this 20 something plus unit deal and I'm evaluating with the broker." And I asked him, my first question is, "Why they need to sell to you?" And he cannot answer that question. So if they're now coming to you who are a Newbie, that means they cannot really sell it to a lot of experienced buyers. I mean 20 something units are the same across a hundred, 200 units; there are so many of qualified buyers out there where the brokers will have relationships with, where they want to sell to the qualified people rather than just go and give it to the Newbie.   Joseph: 10 to 20 unit is kind of like the first property so we're going to have to work with newbies anyway.    James: Yeah, that could be the reason.   Joseph:  But it's just a matter of is it a qualifying Newbie or is it a non-qualified Newbie. The question is that the broker should have probably asked him is where is the financing coming over from? Do you have a proof of funds and did you talk to the bank? This is a full recourse loan itself. There are ways for us to qualify even Newbies.   James: Okay. Okay. Got It. So let's go to your role as a sponsor. So let's go back to the market itself, why do you like Lubbock?   Joseph: Yeah. So Lubbock is, well, no longer, but it used to be a well-kept secret of a great economy market, it's in the middle of the panhandles, it's called the hub city, that's the nickname. And that's because it's one of the most important cities in over a hundred-mile radius. And it has Texas Tech University, it's the biggest engineering school in Texas, and they have over 37,000 students over there. And while we don't do student housing, there's a lot of student housing in the city, but we don't do student housing but the math is simple. For every four or five students the university adds, there's a new job in town. So today, Texas Tech supports over 13,000 jobs, on its own bring one point $2 billion to the city and just retail shopping alone, their students are doing more than $300 million a year.  So add that to a few other factors; economic factors in town that drive a really good economy, a lot of jobs, the unemployment rate in Lubbock is anywhere between 2.5 and 3.2. That's what I've been seeing in the last year and a half out there, which has a downside for a sponsor but we can talk about it later, but for the most part, having such a low unemployment rate in so much job opportunities really gives you more comfort in the B&C class environment because in the B and C class environment, if those tenants lose their job, they don't have a lot of financial depth. If they lose the job and they can't find a job within a week or two, they won't have money to pay the rent. So that's why picking a market that has strong jobs, strong economics was super critical for us.   James: So what is the downside? I don't get that.   Joseph: Oh, the downside is finding good employees.   James:  Oh, got it. Because everybody's being employed.   Joseph:  Because they always have options and they always move and we lost so many maintenance people just because they don't want to work hard. They can easily find a job where they don't have to work so hard so that's just has been a constant struggle out there. But that's just part of the pros and cons of every place.   James: So did you end up buying a deal in Lubbock because you got your first deal there or did you look in a few cities and you chose it or how was it?    Joseph: That's a good question. It's a combination of both. So, it wasn't our first deal, but it was our first big one and it just came through a relationship that we had with the property manager and a broker and we had a chance to take a deal off completely off-market and go for it.    James: Okay. Okay. So once you got a deal, you look at the market, then you think it's a really great market and you continue doing deals in the same market.   Joseph: Yeah, we operate a little bit different today, but that's just how we got to Lubbock back then. Today we are I analyzing markets with a big set of criteria that we're looking for and right now specifically because we try to get out of the way of our brokerage customers, we're looking at a few out of state markets.   James: Okay. Got It. Got It. So when you look at a deal, I mean, can you describe the type of things that you look forward to that describe to you that that is a good deal? Can you describe what are the things you look for in a deal that you would say, okay, I want to do this deal?   Joseph: Yeah. So, the market is the most important thing, it's that simple.  Jobs,  jobs economy, what do they do for a living, is that a one employer town kind of a situation, what's the risk with the market, what the market did back in 2010 when unemployment was high everywhere in the country, that's the things that we first take care of. I'm obviously making sure if we're talking about out of state, we'll always only go to landlord friendly states, that's another very important criteria for us.  But when you look at the actual deal, the actual property, we're looking for value add opportunities. Everything we've done was a heavy lift in value add and it's not easy and it's a lot of work, but it's the only way to really make money. So if I buy a stabilized property, I'm going to have to go find those German investors that are happy with 5% returns. So really, looking for the right value add opportunity when we know we can come in and make a difference and increased the rent and reduce expenses and basically a bump on the NOI that's what we're looking for.   James: Okay. So apart from increasing the rent and reducing expenses, is there any other value add that you think that you find it unique and you think that that's something that can share with the audience?   Joseph: Yeah, so there's a lot of strategies out there when you can leverage to either increase income or reduce expenses, but adding amenities is a good attraction that can help you increase rent. So if you have an on-site gym versus the property that doesn't have an on-site gym, people would be willing to pay a little bit more. A pool is a very big attraction in the C class environment. So we have one property that had a pool, years ago, way before we bought it, and they cemented it in so right now there's just an ugly area that has a fallen apart shed with a cemented pool. So what we're going to do is we're going to convert it to an outdoor kitchen with some picnic tables and shade, just to create a place where the residents can go and have an activity and have fun outdoors. So stuff like that really helps, obviously in-unit amenities is super critical. Upgrading the appliances, resurfacing the counters, replacing old carpets with vinyl planks, that's the kind of thing that people are willing to pay more for.   James: So what, what do you think, let's say, for example, increasing the rent. So let's say you had a million dollar budget to increase rent, but somehow after you buy it, you realize that you only have 500,000 so your budget has significantly reduced. So what's the most important value add that you would do?    Joseph: That's a great question, are we talking interior only?   James: Which one you think is the biggest bang for the buck? You have a reduced budget right now.   Joseph: Well, here's the reality of things, it really depends on the property. If the property looks like crap from the outside, it doesn't matter how nice you make the units look, nobody wants to live on a property that has no exterior light, a green pool and a laundry room that doesn't work. And if the property looks fine outside, I would put the money inside the units because the prettier the unit, the more they're willing to pay. So it depends on the property and what we have to do. Certain properties, if you gate them, it'll be great. Certain properties if you can fence the backyards and create small backyards for the first level unit, it can significantly increase your cost. In-unit washer/dryer connections, that is a big difference maker that people are willing to pay more for in our environment so if I can generate those, then maybe I'll do that.   James: Okay. So let's talk about fencing versus non-fencing property because that's something new for me. So can you elaborate a bit more? Which property makes sense to fence and which one doesn't make sense to fence?   Joseph: First, you got to have the fee the actual space to do that. So if they have sliding doors on the back and it just goes out to the street or just goes out to the green area, then you have the opportunity to just put two panels of fence and either close it or put it like the rod iron and now you created a small backyard for them. People love the opportunity of a private backyard. And I know that because we have two properties that are literally across the street from each other, one of them has larger layouts, the other one has smaller layouts but have fenced backyards and Patios and we constantly have to take people across the street based on the preferences. And you can clearly see that some people prefer to have fenced backyard over larger layouts, even at the same price point. And then some people prefer the larger layout so there's definitely a preference over there to some people.   James: So your fenced backyard, is that a single story unit or is there like a double story but you only fence the ground floor?    Joseph: Those mostly are a single story or townhomes.   James: Townhomes, yeah, I have a property, which is a townhome where it does very well with the backyard, people love the backyard.   Joseph: Yeah. We also have a property that is a two-story building. The first story has a fenced little patio, it's not a backyard, it's not big, but it's a fenced little patio. And then the second floor has a balcony right on top of it. So it obviously works for both the first floor and the second floor.   James: Okay. Okay. So you said this ground floor you put in a fenced backyard but the second floor's balcony, but don't the second-floor people can see the ground floor backyard?   Joseph: No, like I said to call it a back yard is a stretch, it's a small fenced patio.    James: Okay. Got It, got it, got it.    Joseph: It's about the size of the balcony from up top.   James: Oh, okay, maybe that's a good idea. Yeah, I have a deal right now, which we are trying to put a fenced backyard, but it's always like someone on the top will be looking at, so I'm just trying to figure that out and see where they are.   Joseph: You can go to linksupapts.com and see pictures of our property, you'll see what I'm talking about.   James: Ah, cool. Cool. And what about the inside? What do you think is the most valuable remodeling that you can do if you have a very strained budget? What do you think you have the biggest bang for the buck on the inside? Joseph: Okay. Painting floors.   James: Painting floors. Okay.  So that's what you would do, I guess, just to make it look nice inside and the flooring is more for turnover reduction, right?    Joseph: Yeah. People don't need a lot on the inside but seeing the vinyl planks that have, that wood-looking style and a fresh coat of paint on the walls, make a complete big difference versus the old run down carpet or even a new carpet. There's big research I read that talks about the first thing people are looking for, are pet-friendly communities. So obviously hard floors are a lot better with pets then carpets. If you look at any of our property websites, you'll see that the first list in the community amenity is pet-friendly and by the way, if you are not pet-friendly, that is the first thing I'm going to do to increase income.   James: Got It, got it. So you think thinking in terms of miscellaneous income, that's one of the easy value addition, right?   Joseph: Absolutely. Whether it's the pet deposit fee or is it pet rent or whatever you structure it at or just the fact that you allow pets is going to help you with occupancy so pets is definitely an easy one.   James: Got it, got it. So let's say you buy a deal now, it's a value add deal so what would be your first 30-day plan, 60 Day plan and 90-day plan or maybe one year plan on achieving your business plan?   Joseph: Yeah, so the 30-day plan is just to find our way around the property. Every property we picked up in the first 30 days, it's just a lot of dust and you've got to let the dust settle. There's going to be people that have not paid to the previous owner and you're going to have to evict them because they're not paying, period. You will have people that are going to just walk away because in their head it's new management so they're going to increase the rents tomorrow, even though we have contracts, we can't do that. There will be people that are going to try it, ah, new management, let's try not to pay and see what happens, right? So you'll have all that going on in the first 30 days. You've got to figure out who is the maintenance crew, what are they doing, take control over the employees what are they doing. Did you inherit the employees from the previous owner or not? Did some of them got up and moved with the previous ownership, that happens too. So first 30 days is just wrapping our heads around the property and trying to figure out what is where and who does what. After that, we better have our contractors out there and then we'll get started working. We have all that lined up during due diligence. We get bids during due diligence, we set starting work during due diligence and if there are any critical items then there'll be there day one. So our King David property, when we bought it, it was pitch black. There was not a single light on after hours and we had the electricians out there working on the lights the day we took the keys, we didn't wait 30 days or 60 days or anything else. The day we took the keys over, that's when that person was over there.   James: Yeah. The lighting at night it's just super critical. We focus a lot on lighting at night, make sure it's really, really bright. You know, it hinders a lot of crime, it just gives a lot more confidence to the current residents, they know there's a change coming, right? Because it's super easy to do that. Right? We just get the electrician to go and fix all the lights.   Joseph: Yeah. And then we have contractors come out to give us bids and they ask me questions like, well, do you want 3000 lumens or 5,000 lumens? It's like, guys, I don't care. Here's the definition; when you're done, I want it to look like a prison.   James: Fort Knox.    Joseph: If I don't get complaints from some of the residents that it's too bright, then you didn't do your job, that's our definition. So some of my contractors laugh and say, yeah, I know, prison.   James: So, going back to like one year,  within one year, your contractors is done and all that but when do you think you have to step in and what's the trigger point for you that you say, okay, we are not going in the right direction? What are the clues that you look for in the operation that, hey, I thought this is going this direction but we are not in that direction and what would you do in that case?   Joseph: Yeah, so I don't know how many of your properties were exactly on plan.   James: Of course, it's all 100% wrong.    Joseph: Life is what happens when you're busy making plans, right? So it's not about checkpoints, I'm going to check in at 30 days, check in at night, just checking out the year, that's not going to work. You've got to be constantly involved and you constantly have to adapt to whatever life throws at you and turn around. We had one property that when we bought it, it had three-year-old boilers in, so they were practically new that a year later, went up, $25,000 expense. That comes at you out of the blue, you're going to have to adapt, you're gonna have to work with that and figure it out.  The contractor tells you he'll be done by April and it's June and he's barely half-way through, you gotta roll with the punches, that's what it is. Just closer control, monitoring the numbers, working as a partner with the property management team, onsite and corporate, that's the critical things and you've got to work with it. If you made it in a year, that's great. If it takes a year and a half, takes two and a half, takes three, it takes three.   James: But what numbers would you be looking at in the P&L that you are thinking whether you're going the right direction or you're going in the wrong direction? Joseph: Yeah, so every month we take the actual numbers and we put them right next to our projections. So it's kind of like a constant check of where we are compared to the plant and did we spend the capitals that we were supposed to or not? Did we get the units upgraded or not? Did we make time or not? Do we see the increase in rente that we expected or is it below or you did we exceed that? We also have constant market surveys; just because I projected going from, I don't know, 800 to $900, it's great, but if the market went to $700, my projections are going to go flying out the window because that's what the market is. And the other way around, if I projected 900 and the market went to a thousand, I'm not going to stay at 900, I'm going to go to 1000. So, it's like a living organism, right? You got to adapt, you've got to follow, feel the polls, understand where the market is going, where your property's going, where you are and that's really what you got to focus on; it's everything, not just one. James: I think that's the job often operator, where you are looking on a day to day, month to month detail planning in terms of numbers and where you're going, whether you're going towards your business plan goals or you're going to divert from there. That's an important thing. That's what I see as an operator because if you look at nowadays, the GP ship I call it the general partnership, the ship. It's too many people when any investors come and invest in any deals but there'll be like one guy or maybe maximum two guys who are the operators. Joseph: Sometimes there is none. James: And probably you're right. Yeah. But I think if you look for the backbone of the deal, I mean, it may not be the guy who was raising money from you, it may be someone else who's going to be the operator and as I told in my book, just make sure that you look for who's behind the deal, who's the operator, who is the backbone of the deal, that person is the key person in that, going to make the deal whether it's successful or not.   Joseph: Yeah, and you really got to look at it from the perspective of everybody is focusing on getting the deal closed, but getting the deal close is just a little sprint run;  that sprint finish line is the starting line of a marathon and if that was a relay race, it doesn't matter what happened to the sprinter if he comes in two seconds behind or five seconds behind, because that marathon is going to take 24 hours and a lot can happen in that 24 hours. So the guy that runs the property that does the operation for three, five, seven, 10 years, the projection that the whole period is, it's a lot more critical than the 60 days that it took to put the deal together, raise the equity and secure the financing.   James: Yeah. Yeah, that's what has been happening. It's not bad, but I think as passive investors, they just need to know who is the person behind the whole deal. So coming back to some of your personal experience, I know you don't have your own property management company right now. You are using a third-party property management company and I know you did look at setting up your own property management company to take control and all that but can you describe what are the pros and cons that you see on both paradigm and why did you choose the current paradigm or are you planning to change in the future?   Joseph: Yeah, so for us, we had the transition property management last year and it wasn't fun; It was very painful, actually. So I was at the point where I said, okay, let's evaluate it, maybe I should just take on myself. And my conclusion, my personal conclusion, everybody's going to be different, was that, at this point, property management is its own business and you've got to operate it as a business. You've got to build the infrastructure of a company. So I knew that if I'm going to have to build my own property management company, I'm going to have to put aside my acquisition business and my brokerage business and put them away for about a year until I set up all the infrastructure and all the other things. So, for that purpose, I decided to just move on and get another third-party property management.  The advantages you get with third-party property management is you get decades worth of experience combined. If I would have opened my own property management, I would probably hire a regional supervisor and that person would probably have 10, 20 years of experience but when you go to a property management company, you have the owners, you have multiple regional supervisors, you have the back office people, and that's decades, if not centuries of combined experience that you're not going to get doing your own thing. So for us, the brain damage was just not worth it and not to pause to the other two businesses that we were running, maybe in the future, it will make sense. We'll reevaluate then, but at this point, we're not gonna do any of that. James: Okay. So yeah, that's important. I mean, it's a lot of work to set up property management and running it and whether you want to do it or not, it's your personal preference and all that. But I'm more interested in how did you get the signal? Hold on.  So my question to you is you change the property management but then halfway through one of your deal, in your property in Lubbock, what was the signal that you look for that triggered you that something's not doing right and I need to make this change now. I mean, how long did you wait to pull the trigger to change the property management? How did you change it because it's hard for a lot of asset manager to make that call, it's hard? Joseph: Yeah. It wasn't an easy decision to make because you have this relationship that you've built with the team in the property management, but there was just, let's take a step back. I think from my experience, the most important skill for a property management company is hiring skills, everything else is secondary to that because if they don't hire the right people, it's not going to work. And that's really what was the trigger on our transition is we just had a series of unfortunate hiring decisions, that we had to go through multiple supervisors and onsite managers that did not follow what we wanted to do and did not execute the way we wanted them to execute, did not treat our residents right. So that was really the last straw for us is kind of like we gave them a 'get better by this date' and it didn't so we just decided to move on and break the package.  There was no hard feeling, and I still talked to the previous property manager ownership, but we have accountability to our investors and we have accountability to our partners and we got to make sure that if things are not moving in the right direction, then we make a change.   James: But what was the signal? Because you are sitting in Dallas and this isn't Lubbock. And what is the signal that gives you that hint that something is not right?   Joseph: We had a property that we had a big surge of non-renewals; residents that didn't want to renew the lease. And that was really one of our big flags and since then we've already implemented a process where we bypassed the property management company and sent surveys directly to the residents to get a feel of what's going on in the property; how do they feel, how were they getting treated? So we just had a manager that when we were on site, she was all wonderful and great, but when we were not on site, she didn't treat the residents right and that was just really bad because retention is critical and when residents don't want to renew because the manager is not treating them with respect, that's a big problem. James: So, was the property management company with you sending survey direct to the residents?  Joseph: That was non-negotiable at that point.  James: Okay. Okay. So when you saw a lot of non-renewal then you said, okay, I'm going to just do a survey on our own, which is a very good thing because I think a lot of people struggle to identify that weakness, right? But you're right, non-renewal can be a good indication of how the management is treating them or whether the work orders are not being completed as to what the residents want. Because as you know, turnover is going to be the biggest expense in any market family operation, especially in Class B and C. And once you see that, that's a red flag there. So let me ask you a few other things that you want to give advice to Newbies, right? So can you name like three to five tips for Newbies who tried to start at this stage of the market in multifamily? Joseph: Yes. Start with, don't be optimistic. There's a lot of really optimistic underwriting out there that come across my desk and it's scary. Yes, the market might still go up, we don't have a crystal ball but if your exit strategy depends on you being better than the market today, then you've got a problem. If the entire market is at 90% occupancy and your exit strategy depends on you being 96% occupied, there is a problem there. If you plan on rents going up, but you don't plan on expenses going up, you've got a problem. So these are the little things in your underwriting that can really trip you because it's excels live, very easily. All you have to do is to tweak a number here and tweak a number there and you take a five cap transaction and make it an eight cap transaction. and that's just not something that you should risk. One thing I don't like in underwriting that you see a lot from big brokerages is a 1% loss to lease. I see you laugh; as an operator, I don't want a 1% loss to lease. If I have a unit that rents for $700 market rent, but I have a residence in it for 650, I'm not going to kick him out if it's time to renew; $50 a month, that's $600 a year; it's going to take me about $1,500 to renovate the unit, that means it's going to be more than a year and a half before I see my money back.   James: Yeah. And you have vacancies too and you have all the stress of turning around the property.   Joseph: That's what I said, it's like more than a year and a half at least so it's kind of like, why would I do that? And if you look at $50 out of 700 that's more than 1% so that's really where you see an underwriting like this, you need to scratch it off and put a more reasonable number in there. And don't ask me what is a reasonable number because it depends on the property. If your rents are $1,000 a month, you can take 2 or 3% but if your rents are 400 and you're not going to kick them out for $25, but $25 out of $400, that's 7- 8%, so that's really where you got to be realistic; you've got to look at the numbers. So when we have, for example, in the underwriting, we underwrite occupancy and we've projected occupancy for the next three, five, seven, 10 years, whatever the whole period is, I also have another table right next to it in the excel file that shows me what it looks in unit numbers because when you put 7% or 8%, it's easy to just think, oh, it's just 7% but if you have 7% out of a hundred units, that's seven units vacant but if it's 300 units, now it's 21 vacant units. So I always like to kind of put things back in perspective; percentages to dollars, dollars to percentages and so on just so people will kind of realize that, okay, it's not just a number that I throw on there. So that's what it's going to meet. James: Got It. Got It. So let's say for passive investors looking at a deal that's being presented to them, right? So we talked about the things that we want to watch out for even for newbies who are sponsors, but as a passive investor, how can they identify that this sponsor is being aggressive?  Joseph: So for a passive investor that looks at an offer, any offer, I say they have to focus on four different things. First, they got to look at the market. Just like we talked at the beginning, what is that market? What is the job worth? What is the economy? If you're going to have a property that has a 7% unemployment rate today in 2019 when the market is hot and there are more job openings than people that request unemployment, then that's not a great market to be in when the market shifts. So where's the market?  The second thing they need to look at is the opportunity, the actual deal itself. This is where you look at, how conservative is the underwriting, did they underwrite for vacancies, did they underwrite for economic vacancies, did they underwrite for capital that's going to have to be done capital reserves and so on? And the third thing they need to look for is the team, like you said earlier, who's the operator? What's their track record, what's their background? And then the fourth thing, which is something I just added recently, they need to look for one letter in 150 legal documents and that letter is, unfortunately, the letter F, just to make sure they don't get f'd. So my distribution is going to be considered the return on investment, return on capital, or is it going to be the return of capital with an 'F' because it's gonna make a huge difference between the two if you get a return on capital or return of capital. James: Yeah, I know what exactly you're talking about. Can you briefly explain the two scenarios so people can get it very clearly? What is the difference between the return on capital and return of capital? Joseph: Yeah, so if you give me $100,000 and I structure our returns as return on capital and I give you, let's say, a 10% preferred return, then in the first year, I'll give you $10,000 that's 10% of everything that has happened. The next year, if I want to give you 10%, I have to give you another $10,000 because your capital in the deal did not change, right? However, if I'm doing a return of capital, then the first year I gave you 10,000, your remaining of the capital in the deal is now 90,000. For me to satisfy the 10% preferred return, I'm going to just in a year a half to give you $9,000 this year and the next year it's going to be 8,100 and the year after, so on and so on so that's one thing.  The other thing is when we get to the sale part on the return on capital, if we had no capital event, like a refi' or something of that in the middle, then I first have to pay you back all your $100,000 and then whatever is left, we get to split whatever the split is between the sponsors and the and the passive investors. However, if I've depleted your remaining capital basis in the deal, so now you have let's say $50,000 remaining, all I have to do is give you your $50,000 and then we split. So by putting one letter in that document and there are usually 150 pages that you're going to get handed over as a passive investor and all they have to do is change one letter, just one. So I think that if a sponsor does that and they don't clearly explain that to you, then that's in my opinion, not so ethical. James: Got It. Got It. Yeah. A lot of times passive investors who jumping into investing passively in commercial real estate, know a lot about the deal two to three years after they started investing.  A lot of times they did not know all these types of details in the beginning because it's a fear of missing out, everybody wants to invest because they didn't want to miss out; that all their friends are making money in the same asset class and they didn't want to miss out. They forget about all the legal structures that they have in the PPM or the company agreement that's given to them.  Let me look at one last question; so tell us, where can the audience find you?    Joseph: Yeah, it's very easy. You can find us on our website, my email, my phone number, it's all there. It's Ebgtexas.com. That's our brokerage website, easy to find us.    James: Okay. Awesome. All right, audience, thanks for joining me on Achieve Wealth Podcast. And one thing to not miss out is make sure you guys go and look at Facebook; we have a new Facebook group called Multifamily Investors Group. We have grown up to like 680 members right now within two or three weeks. The first week, it's we have like 500 people. And that Facebook group we have created to show live operations from the ground up and talk just specifically about multifamily. We don't have a lot of promotions or spam there and hopefully, everybody's getting value. So I encourage you guys to go and check it out, Multifamily Investors Group on Facebook and join them. Thank you. Thank you.

Survival Lessons from the Life of Joseph You'll Get Through This A Sermon Series by Max Lucado.