Episode 150: How Profit First Shaped This Father-Daughter CPA Firm with Byron McBroom & Melanie Sikma
The Profit First REI Podcast
January 26, 2023
David Richter
Summary:
On the Profit First for REI podcast, we hear from many investors and other business owners about their first-hand success at applying the Profit First method. While there is no better person to relay its benefits than the entrepreneurs who have used it for their businesses, someone else is just as close to your finances as you are—your accountant.
Today we’ve got Measured Results CPA joining us for the show, namely its Founder, Byron McBroom, and Business Development Consultant, Melanie Sikma. They have been hard at work helping business owners plan their taxes through Measured Results and manage wealth through Abundant Life, where Melanie serves as the CEO.
Stay tuned as this father-daughter tandem gives us a new perspective on why Profit First is the biggest boon for managing your finances!
Key Takeaways:
[00:36] Introducing Byron and Melanie of Measured Results CPA
[03:54] Why Profit First Appealed to Their Firm
[06:23] Why Business Owners Live Paycheck-to-Paycheck According to CPAs
[09:08] How Profit First Fixes Profit Challenges
[10:50] Measured Results CPA and What They Do
[14:39] Wealth Management at Abundant Life
[18:22] Abundant Life and Savings
[21:32] Measured Results and Its Dedication to Simple Communication
[23:44] Tax Tips From Our Guests
[28:25] Connect With Byron and Melanie
Quotes:
[10:34] “The real beauty of Profit First is it forces [you] to address the problem early. It does not wait till the business is struggling to stay in business.”
[13:18] “My job is to sit and create questions for people to ask, so we get the answers we need to…have them pay as little tax as legally possible, and stay out of trouble.”
[22:05] “We say we don’t speak accountant, as we speak English and [put] it in simple terms. That’s something that we try we strive for, actually.”
Melanie’s Instagram for Tax Tips: https://www.instagram.com/melaniesikma
Measured Results Instagram: https://www.instagram.com/measuredresults/
Measured Results Website: https://measuredresultscpa.com/
Tired of living deal to deal?
If you are a real estate investor or business owner who is tired of living deal to deal, and want to double your profits, head over here to book your no-obligation discovery call with me. Either myself or someone from my team will hop on a short call with you to get clear on your business goals, remove any obstacles holding you back, and map out a game plan to help you finally start keeping more of the money you work so hard to make. – David
Transcription:
Byron McBroom:
The real beauty of Profit First is it forces ’em to address the problem early. It doesn’t wait till the business is struggling to stay in business.
Outro:
If you’re a real estate investor who’s sick and tired of living deal to deal, then welcome home. Hear from everyday real estate investors just like you, and discover how they’ve completely transformed their business by taking a Profit First Approach. This is the Profit first for REI podcast, where we believe revenue is vanity. Profit is sanity. It’s time to start making profit a habit in your business. So here’s your host, David Richter.
David Richter:
This is a special episode of Profit First for Real Estate investing because we are showcasing the people that we have put our trust in on the tax side because they’re Profit First centric and they gel well with our philosophies, but then they are getting actual results of putting more money in your pocket from the tax side. They want to be a profit center for you and not an expense, and they back that up with the results that they get. But we dive into a bunch of different stories too, of how they’re doing this and then that we’re, we dive into how they’ve seen Profit First help people achieve their goals. And I want to get that for you too, because he tells what is success, you know, like with Profit First. He also says, what is success that he’s seen with his clients and some of the things that they’ve instilled from the people that they’ve learned from. Then they also talk about where investors are and like where business owners in general, like just emotionally when they have to think about the money. So you’re going to get something from this episode. There’s lots of gold nuggets in here for you to take action on immediately. Can’t wait for you to hear this. Byron Mcbroom and Melanie, his daughter as well too, is on here. So I’m really excited for you to get to hear both of them.
Hey, I have the Melanie Sikma and Byron McBroom here, and I am super excited because we’ve partnered with them. They’re the, some of the CPAs that we use, uh, in the business that we do. So there you go. I mean, some of, you’re probably just gonna go out right now and look up their website, but I wanted to get them on to talk about their philosophy, why they’ve partnered with us, like, why they like Profit First. This is a father son, uh, father daughter team. And they, they’ve also got another daughter that works in the business as well too. This is a family run business, but they run quite a great operation over at Measure Results cpa. So I’m really excited about that. So thank you both for being here today.
Melanie Sikma:
Thanks for having us.
Byron McBroom:
It’s good to be here
David Richter:
And Byron keeps, yeah, Byron keeps trying to kill himself too.
Melanie Sikma:
<laugh>
David Richter:
I don’t know what’s up with that? That if you can’t see him and you’re listening to this, he’s got a neck brace on. And it reminds me, uh, cuz I think it was you, Melanie, when we were having one of our conversations and it’s out in a, like this, I don’t know if you’ve seen Groundhog Day with Bill Murray, but he is like,
Melanie Sikma:
oh yeah
David Richter:
I’ve tried, I’ve stabbed shot, you know, like electrocuted. Like he’s going through all the things that he’s tried to do in order to like stop the day over and over again. And it’s like, my dad’s been, you know, like, yeah, no, all these different things. So,
Melanie Sikma:
oh yeah,
I don’t know what’s up with that, but I’m glad he is here today. He does have the neck brace on. He is doing that for added sympathy. I think it’s,
Byron McBroom:
<laugh>
David Richter:
He doesn’t need it anymore. Just kidding. He totally needs it. But I just, I did wanna thank you for being here today, even though you’re trying your hardest just to put yourself outta commission. So thank you for being here, Byron.
Byron McBroom:
Well, it’s good to be here, you know, when
Melanie Sikma:
You try, uh, but, uh, we’re not letting
Byron McBroom:
Teary-eyed emotional on that one. But when you’re in recovery, like, there
David Richter:
like you go, So
Byron McBroom:
There’s just not much you can do. So you just look forward to stuff like this to talk to people. I’m a high eye influencer, so I like to talk to people anyway, so just getting outta the house and talking
David Richter:
okay
Byron McBroom:
To people is just a treasure for me. My wife’s already heard my story. Oh,
David Richter:
There you go. There you got to peek behind <laugh>
Melanie Sikma:
<laugh>.
David Richter:
So you can’t just sit home and, and tell this story. But before we go into your story and like what you guys are doing, I don’t have to hear from your guys’ perspective, like why profit first, like why do you like that philosophy? And uh, Byron you’ve even mentioned you’ve read several of his other books as well too.
Byron McBroom:
Mm-hmm. <affirmative>,
David Richter:
Mike Mackowitz, but you know, like what was appealing to you about those systems?
Byron McBroom:
Well, what I like about the system, I work with nothing but small business owners. And small business owners usually are focused on their business and not on their numbers. And so they, and usually by the time they get in trouble, it’s too late to fix it. And what I love about Profit First, particularly like with the payroll, you know, if you set aside a percentage for payroll, when you run outta money in that account, you have an early warning system. You know, taxes are a big deal. I like to have profit first for
David Richter:
Yeah.
Byron McBroom:
You know, figure out what percentage of taxes you’re gonna pay. Taxes aren’t a burden if the money’s set aside. And if you’re not setting aside, at least you know that you’re borrowing it or stealing it from the government’s money. Some people will even label that account the government’s money,
Melanie Sikma:
<laugh>.
David Richter:
right
Byron McBroom:
They might use it in the business, but at least they know
David Richter:
yeah
Byron McBroom:
They’re using it. I’ve had a lot of clients used to do a lot.
David Richter:
That’s really good.
Byron McBroom:
I used to do a lot of CFO F work and a lot of people really just don’t understand their numbers. And a system like Profit First just really pulls ’em in and forces ’em to address the problems that they don’t want to, but they have to. So, and you mentioned about
David Richter:
yeah
Byron McBroom:
talking about the other books.
David Richter:
I agree with that.
Byron McBroom:
I’ve read the one of my favorite.
David Richter:
Yeah.
Byron McBroom:
I mean, he’s a funny guy to listen to and I loved his book, the Pumpkin Plant. So I actually went out and bought some of those seeds. They come in a Ziploc bag and they all have numbers written on him. So I planted number one thou 179 and 182. I planted ’em in my yard and in the pumpkin plant, yet you plant several plants and as they come up, you kill off the bad plants, which he, he’s referencing to the customers that are not as good. And so then you finally get that one plant that you fertilize and all the fertilizer and all the water goes into it, and then you start killing off the weaker pumpkins. Well, my nickname in my gardening world is Brown Thumb, Byron. And, uh, the Pumpkin Plan was not a good plan for my gardening. So <laugh>, but I think it’s a good plan in business
Melanie Sikma:
Is Brown Thumb Byron, because he kills everything he tries to keep alive. Although he had a pretty good garden for a while there.<laugh>.
David Richter:
There you go. Those are some great philosophies too. And why I want to get, you know, dig a little deeper. Why do you think a lot of business owners that you’ve seen, I’m sure you see this in the small business world, you know, live deal to deal or live paycheck to paycheck and need a system like that to, you know, for the warning signals and systems like you were talking about.
Byron McBroom:
Well, it’s like small business owners and accountants, you know, we’re the stepchild, we’re Cinderella, we might be a beautiful thing, but they’re just not paying attention to us. Okay. And it’s because they’re just so busy. It’s so difficult as a business owner, people don’t really appreciate, you know, most business owners are working 60, 70, 80 hours a week. They’re ignoring their family. They’re making, some of them are making less than minimum wage. And a system like this just forces ’em to address what their systemic problems are. And if you can fix the system, then the business usually can flourish and take off and make you know, get people wealthy. But they have to fix the system first. And Profit First is just, I’m just so high on it as far as giving people a systemic way to make a profit in their business and make sure money’s set aside for the right things.
David Richter:
Why do you think that profit for profit businesses have trouble making a profit?
Byron McBroom:
Well, it’s like farmers. Okay, farmers, if somebody makes money on wheat, everybody starts planting wheat. And so then they plant it till some farmers don’t make money. And out there in the business world, there’s efficient operators and there’s inefficient operators now in the last couple years
David Richter:
mm-hmm. <affirmative>,
Byron McBroom:
It’s, I think in, for some businesses, not all, because Covid has, with all the P P P money and all the EM employment retention credits, if you’re not making money now and with construction being as high, you know, high priced as it is, if you’re not making money now, you’re never gonna make money in the business. But there’s, you just have to learn how to be an efficient operator in your business. And most people are so busy putting on the tool belt with their business. Well, regardless of what the business is that they don’t really study the business. They don’t take time to work on the business. And like I said, profit First, since you have an early warning system, forces you to address why is this happening? And they just forces ’em to do, to address it unless they choose to ignore it. And that’s their own fault anyway.
Melanie Sikma:
I’ve also seen a lot of business owners think, you know, the top line revenue is what they’re making, what’s, you know, they think that that’s the money in the, the bank.
David Richter:
Yeah.
Melanie Sikma:
Andso they think they have a lot more to spend than they actually do. And so there’s no real budgeting. Um, and so I think profit, the Profit First mindset and strategy really addresses that too.
David Richter:
Awesome. How would you say it addresses that? Because I see that all the time too. So like in your words, how would you make, you know, like if they are looking at the top line and it’s, they’re thinking that is that, you know, what they’re making, how does Top, how does Profit First fix that?
Melanie Sikma:
Yeah. Dad, do you wanna address that one?
Byron McBroom:
Well, what it is with Profit first, you can’t just look at the top line because the top line comes in, you rat hole a certain amount for payroll, you rat hole a certain amount for materials. You rathole a certain amount for operating expenses depending on how far di how far you deep dive into the different accounts. But everything is accounted for. And let’s say you’re running on a 20% profit margin and you’re taking 15% of that for owners pay, that 15% owner pay is rat hole. So if your profit is not that 5%, it shows up loud and clear for you. It yells at you really. And
David Richter:
yeah
Byron McBroom:
It just gives, it just forces
David Richter:
I think that both of you hit the nail on the head.
Byron McBroom:
So
David Richter:
Yeah, exactly. Forces people to address the problem, gives them a good system and then they can move from there, you know, like to where they, you know, where they need to be and it gives them a very clear view. I really like that cuz obviously, you know, this is what we do all day long, but it’s nice to hear from other people
Byron McBroom:
<laugh>
David Richter:
That are in the financial world as well too, of like how they’re seeing how other people are, you know, using the money and, you know, viewing it as well too.
Byron McBroom:
Mm-hmm. <affirmative>.
David Richter:
So, okay,
Byron McBroom:
Let’s
David Richter:
Get into a little bit about what you guys do.
Byron McBroom:
Mm-hmm,<affirmative>. The real beauty of Prophet first is it forces ’em to address the problem early. It doesn’t wait till the business is struggling to stay in business.
David Richter:
yeah
Byron McBroom:
Okay. Melanie, let you take the lead on
David Richter:
Right.
Byron McBroom:
On what we do.
David Richter:
Yeah, that’s very true.
Melanie Sikma:
All right. Yeah. So we just help, uh, small business owners. Like my dad said, we work with small business owners anywhere from two to 25 million in their top line revenue. We help people under that as well, but that’s really where we come in. That’s our sweet spot. Um, and we help them save money on their taxes. That’s kind of the bottom line. We help, um, give less to the IRS and keep more into their business, which can keep more in those different buckets.
David Richter:
Yeah, I love that right there, because that’s why we want to partner with people like Byron and Melanie because they’re profit first, conscientious as CPAs and they wanna make sure that they’re working the system for you. Like making sure that they’re not just there for the irs, they’re there for you, the business owner, and making sure. And then one of the things that honestly sold me on them upfront was when Byron took me, like through the seventh step or something, like process of what they do with every business owner of like helping them with actual planning and strategy as well too.
Byron McBroom:
Mm-hmm. <affirmative>.
David Richter:
And because I feel like in, especially in the real estate investing world where we are, that’s all anyone really cares about. Like they want the preparation and stuff done, but they want the strategy planning because I don’t know if you have a lot of real estate clients or if you’ve worked with real estate investors that you love, you know, to buy the properties. And there’s a lot of things that they can do with that. So I, I would just want to at least point that out where I, you know, where I connected with you and what, you know, resonated with me as like why would we partner with someone?
Melanie Sikma:
So yeah, if you’re making any money, if you’re a small business owner, your CPA should be a profit center for you instead of a cost center. And we find there’s a lot of CPAs out there, they’re really good at filling out the forms, um, but they’re not good at strategizing. And so if, you know, if you’re not meeting with your C P A before the end of the year, we’re about to enter into tax planning season and our firm’s actually busier during this season than it is during tax season because that’s where our clients get the most value out of us.
David Richter:
Yeah, I really do like that, It’s this season. Go ahead, Byron.
Byron McBroom:
The big thing you should notice when you’re talking to your accountant is do they ask you questions to fill out the forms or do they ask you questions to save you money? Most accountants just fill out the forms.
David Richter:
Hmm.
Byron McBroom:
And, but they’re doing a great disservice to people. But we like to have is part of what I do is I don’t fill the, I don’t actually do the returns anymore, but my job is to sit and create questions for people to ask. So we get the answers we need to save, have ’em pay as little tax as legally possible and stay out of trouble. But it’s take a look at the questions your accountant’s
David Richter:
yeah
Byron McBroom:
Asking you and if they’re save money questions, that’s good. If they’re fill out the form questions, then something’s being left on the table.
David Richter:
Yeah.
Melanie Sikma:
And I’d say what my dad’s done really well, cuz he’s not a spring chicken, he’s, a <laugh>. He’s getting up there. We joke that he is an old fart here, but, uh, <laugh>, he’s kinda gearing towards, you know, wanting to work less and just work on the ideas in the business. And that’s where he’s done a really good job of systematizing tax planning, where a lot of the times it’s just solely dependent on the CPA and the person that you’re working with, where he’s done a good job of building out a system so that not, it doesn’t only ride on his shoulders to be able to save our client’s money, but every CPA in our firm can do the same, you know, bring the same value to our clients.
David Richter:
Yeah, that’s really good. That’s why I liked it cuz I mean, when he broke it down to me it was like, these are the things we can do with every business owner no matter what. And these are the steps that we take. I’m like, I really like that. That’s something that, you know, like every business owner needs. So it was
Melanie Sikma:
oh sure,
David Richter:
Very informative. Awesome. There you go. Well I want to keep going here that, so you’ve got the CPA side, you know, and you’re doing that and then you’ve also got like the wealth building side as well too. You do some things on that. It’s not just, this is why I really like the measure results. It’s not that they only do the CPA work and have it be a profit center then like what do you do and manage the wealth. So do you want to go into that at all, Melanie or Byron?
Melanie Sikma:
Yeah, I can do that since, yeah, that’s my own side of things. I, uh, have built my own company. I’ve partnered with, um, measured results and it’s uh, my company’s Abundant Life services cuz I, you know, want to create abundant lives for my clients. And then also I donate 25% of my profits to orphans worldwide to create their own abundant life. And um, what we do there is we do a lot of the infinite banking stuff. And the reason for that is it goes really well with our tax strategies. So we take money that our clients would’ve owed the IRS and instead we turn it around and we fund their future and we put in a tax-free vehicle so it’s gonna grow tax free and they’re not gonna ever have to pay tax on that dollar again. And that’s when it really gets powerful is when we can take tax savings and then fund a tax-free retirement with that.
David Richter:
Yeah man, we could definitely go down a rabbit hole here for sure because there’s a ton of questions around it. But I want to say too that I believe that what they do on that side goes very well with what they do with tax planning and also profit first.
Melanie Sikma:
Yeah.
David Richter:
Cause it’s like you gotta be profitable here. What’s set up another account and like, let’s fund our future because everyone that comes to us, like for our services, wants to create wealth, wants to be, you know, get off that rat race.
Melanie Sikma:
Yeah.
David Richter:
And this is another way to do that. So I really like that you have that side of it as well too.
Byron McBroom:
Cool.
Melanie Sikma:
Yeah, that’s a, as long as many, I think as many areas in your life that you’re being strategic is really powerful. And having somebody that’s a professional behind your back is, you know, that we, I actually just did a post on this yesterday on Instagram. Um, my dad a while back, he tried to cut his own hair and he came into the office and <laugh> his hair was all jacked up in the back. It was hilarious. And I go, dad, like, did you try to cut your own hair? And he says, yeah, why? And I said, well, it, it looks like he did. And so he said he was just in a hurry and so he tried to do it himself when in reality he had to go back and do it. And so my whole post topic was don’t do it yourself, find a professional. Um, I just talked to a stone fabricator that was trying to do their own bookkeeping and it’s a hot mess, so it’s gonna cost him more money than it would’ve if he just hired somebody. Um, you know, find a professional. And like you guys, the value you guys bring for your clients is huge.
David Richter:
Yeah.
Byron McBroom:
Well, a cool thing
David Richter:
that’s really good
Byron McBroom:
is
David Richter:
alright go ahead.
Byron McBroom:
If you’re setting aside a percentage for taxes, it’s, and let’s say that’s 7%, whatever the number is, it’s 7% with some planning and doing it with intention, maybe you only have to set aside 3% or 4% and then all of a sudden you have that three or 4% working for you instead of working for the government. And you’re still not surprised, but it just gives you a lot more working capital.
David Richter:
Yeah, that’s very true. And that’s what the business owners want. They want to pay as little taxes as possible and use any of the extra to fund
Byron McBroom:
mm-hmm. <affirmative>
David Richter:
The wealth fund, the future fund, the things that they wanna do. So I absolutely love that.
Byron McBroom:
Mm-hmm. <affirmative>.
David Richter:
So then when you do work with people and they come to you, what are some of the biggest results that you see from working with them? You said, you know, like there’s, you know, that it should be a profit center for them.
Melanie Sikma:
Yes.
David Richter:
So what are some of the things that you’ve seen with your clients? Obviously disclaimer, not all results are gonna be the same
Byron McBroom:
<laugh>.
Melanie Sikma:
Yeah.
Byron McBroom:
But I just wanted to see like, what are some of the things that you’ve done to help people?
Melanie Sikma:
So the average person that I talked to saves about 38,000 in permanent savings.
David Richter:
wow
Melanie Sikma:
That doesn’t include any of the deferred savings that we get them. Um, I just, you know, there’s been a couple people recently we’ve been able to get them about a hundred grand in permanent savings and then, uh, about a million dollar deferral. So it’s just depends on the person and what they’re
David Richter:
yeah
Melanie Sikma:
Currently set up at. Um, one tip, you know, if you have kids you can put your kids on the payroll and you can pay them 12,950 and tax free money. And my kids are my little models that I post to my Instagram and it builds rapport with people that I wanna work with. So that’s the way that I justify it. Um, so that’s just a little pointer out there for them. But those are, those are the things that we look at is what are areas in your life that you’re already have going on. What can we use strategically to be able to offset your taxes?
David Richter:
Yeah. It’s really good. Byron, do you wanna add anything on that point?
Byron McBroom:
Well, I’d like to let people know the difference between a permanent savings and a deferral savings. For instance, if you pay your child 12,950, you get a tax deduction for that. And maybe that saves you, depending on your state, five or 6,000 bucks. Okay. That’s a permanent savings cuz you never have to pay that money back if you put money into a traditional IRA and take a deduction for it, at some point in time when you pull that money out, you have to pay the taxes back. That’s called a deferral savings. And of interest, and Melanie, maybe you can explain this, we have a big super big deferral program where you can get a massive tax, basically a tax-free loan from the government and use that in your investments. We had one client in particular that did this and this guy was pretty substantial, but he invest, basically we were shuffling the funds around a year in and he was deferring the tax on 15 million bucks. Now he started this process in about 2010 and the tax on 15 million in California is about seven and a half million dollars in tax that he hasn’t had to pay. He still owes it, but he hasn’t had to pay it. But he took that seven and a half million dollars and invested it in real estate. So can you imagine seven and a half million dollars in cash invested in real estate in 2010, 11, and 12? How much money this guy’s made just on money from the government. And this is what
David Richter:
<laugh>
Byron McBroom:
We do a lot for people. We also take that money, you know, if you know somewhere to invest it, it’s a great thing. But a lot of times people don’t know what to invest it in. And they also, you don’t wanna lose the principle on this cuz you still owe the irs. And that’s where we do a lot of investment with insurance products
Melanie Sikma:
mm-hmm. <affirmative>,
Byron McBroom:
Because the principle is guaranteed never to go down so that you, the money that you owe the government, you never lose, but you still can have that grow. And Melanie works a lot with people on that particular example.
David Richter:
Yeah.
Byron McBroom:
But there’s a big difference between deferral money and permanent savings. I always try to get the permanent savings first and then get the deferral savings.
Melanie Sikma:
Yeah.
David Richter:
Awesome. That’s why I love that you can put it in simple terms too. You know that a lot of CPAs that I’ve had run-ins with, you know, they’re either talking way up here like over people’s heads or way down here or like they’re talking down to them and it seems like, like you’ve got a very simple process to be able to say, these are the things that you could do that are very simple. Like, and not without, you know, beating them over the head or making them feel small. Like, do you feel like you run into that a lot with other CPAs or is it just me, you know, like is this something that kind of separates you guys from other people that are out there?
Melanie Sikma:
Yeah, we say we don’t speak Cantonese, we speak English and
David Richter:
Okay.
Melanie Sikma:
So it’s putting it in simple terms. That’s something that we try, we strive for actually.
David Richter:
Yeah. Well and well good, that’s what I like and I like hearing that for sure.
Byron McBroom:
Yeah. A lot of CPAs like to let their clients know that they’re smart people, so they gotta talk in big words and all that. But you know, all they’re doing is complexifying everything. What we wanna do is put it in terms that you understand. I mean, for the most part, you’re not gonna study this and get a real super knowledge on it. You’re gonna have trust that we’re doing it right. You know, that’s the way it normally works. But we want you to have a fundamental understanding of the basics so that way there’s some education in there. Or get it educated as much as you want. Some people want it all, some people don’t want to have just take care of it for me. But yeah, we like to educate people as much as possible, as much as they wanna be educated in the language that they want to talk in.
David Richter:
Yeah, absolutely love that. Because that’s what people are looking for. They just want to know that someone’s there, they have their back and that they’re gonna help them and walk along here. So that’s why they’re on this podcast, that’s why we’re working with them. We wanna make sure that you have a partner in someone who actually understands you on the tax side and likes, you know, and likes you, wants to work with you and wants to help you get to where you want to be and not just another, you know, another person they need to feel smart around and prove their,
Byron McBroom:
hmmm<affirmative>
David Richter:
Prove their worth. So absolutely love that. But uh, yeah, I just have a couple last questions here. What is, okay, you talked about Melanie, you talked about the tax savings, you know, or the permanent savings like with your children. Do you have any other tips tax-wise or anything else that you could share with the audience?
Melanie Sikma:
Yeah, so one thing that my dad does with my grandma is he utilizes her lower tax bracket and uses that, you know, he was supporting her anyways and so he just, um, utilizes her lower tax bracket, lets her keep a certain amount of that and then she gives back the rest. And there’s a way to do that and it depends on everybody’s circumstances, but the biggest thing is looking at the lower tax brackets around you and how you can use those and leverage those to offset your tax exposure. Um, and tho that’s where we get a lot of the big permanent savings is looking at different, you know, we can get kids colleges, um, deductible and kind of use that to pay for colleges. Um, and yeah, dad, do you wanna add to that at all?
Byron McBroom:
Yeah, I wanted to give you some specific numbers on that. Okay. And so what I did with my mom is I formed a corporation, my mom owns it and I put, I pay that company $75,000 to do services for the CPA firm. That 75,000 now gets taxed to my mom. She just has social security income, so she only pays seven or $8,000 on that, but I save 37. So there’s about a $30,000 savings, about 29, 28, $30,000 savings. And from that, I give her the money that I give her anyway. And she makes a gift to me every year of the remaining money. And it, you know $1,500 a month extra to someone that’s just on social security changes their life. And so I get all the credit for it, which is great, but the government’s really paying for it. So it’s kind of a win-win for me
David Richter:
<laugh>
Byron McBroom:
And my mom <laugh>. But those are the sort of things you wanna look for.
Melanie Sikma:
Mm-hmm. <affirmative>,
Byron McBroom:
Who around you is in a lower tax bracket? You have an indigent brother-in-law in the basement, you know, you have, do you have kids in college? That’s a huge plan that we do for a lot of people. Uh, there’s just lots of the secret is just to look at the whole atmosphere that you’re in the ecosystem and how do we pay as little taxes as possible as a group? And that’s where a lot of our savings come from.
David Richter:
That’s really good. Okay. So that’s good information on the tax side. What about just general business advice? Like, could I get a little snippet from both of you of, since you’ve worked with a lot of small business owners, what are some of the things, the key things that you’ve seen, you know, successful people or just some last minute advice here for the people listening?
Melanie Sikma:
Um, what I’ve seen, a lot of people, the people that are most successful that I’ve talked to, they’re really good delegators. They’re, you know, they find people that they give a clear explanation of what they want and they have a good picture, but then they delegate it and they trust, um, whoever they’re delegating to basically complete that process. Um, and so I think that’s where it goes along with the professional side, find it professional. It’s find somebody that you can trust to delegate to and then figure out what you can delegate. So kind of what I’ve seen really a lot of successful people do
Byron McBroom:
And
David Richter:
Right
Byron McBroom:
What I’ve seen people that are real successful is they really understand, they have a focus on what their core values are. You know, I know that you’re, David, you’re familiar with core values and all that, but we hire fire and discipline to core values here at Measure Results. And if you can have someone who’s pushing in the same direction as you and your whole team of, I have a team of 40 and we hire fire and Discipline the core values. So in theory we’re all pushing in the same direction, you really can get a tremendous amount more accomplished when you’re all trying to achieve the same thing. So a real focus on what your core values are.
David Richter:
Yeah.
Byron McBroom:
And making sure that your team’s on the same page and in alignment with you on what’s trying to be achieved. And the other thing I noticed is that
David Richter:
Mm-mmm
Byron McBroom:
People that are really successful, they pretty much know their numbers. And that’s where I can’t over exaggerate how much of a value a CFO service is because you’re sitting there focused on the business and they’re gonna basically, uh, tell you, Hey, here’s where you’re doing right and here’s where you suck and you need to hear that. That way you can fix it, but you gotta know the numbers too. It’s really critical.
Melanie Sikma:
Mm-hmm.
David Richter:
<affirmative>. Yeah, those are really good points. And I think if you’re listing right now and you’re downloading this podcast and just consuming it, those are three big areas that core values is critical. That’s like your North Star and then you’re delegating to those people then that have those same core values and now you’re showing your trust in them. I love how Melanie had that. And then setting those clear expectations and then knowing those numbers, like making sure you know where you stand. So that’s some really great last minute advice here. So I wanna say, where would people find you like and what’s the best place to reach out to you? It sounds like, you know, for the tax side, you’ve got the CPA service and then Melanie, where would they find you as well for, you know, for the wealth building, the I B C, that type of stuff, the infinite banking, uh,
Melanie Sikma:
yeah
David Richter:
To get both of those.
Melanie Sikma:
So I do a lot of tax tips and um, just kind of all around tips on Instagram at MelanieSikma, that’s my handle. And then sikma and then we do some tax tips. We try to be pretty regular about posting on Instagram at Measured Results. So that’s another handle you can follow. Otherwise you could just check out measuredresultscpa.com and you’ll be able to find us that way. Um, we’re revamping our website, so it’s got some work going on there, but uh, you’ll be able to get in contact with us that way.
David Richter:
Awesome. Well this has been amazing here. I loved, uh, being able to interview both of you, the father daughter team, and they do have an awesome team behind the scenes as well too. Their other sister works with them and then there’s, they’ve got a lot of good people there. We endorse them. I love that they have, like I said, the profit First mindset. They really care when they talk to you about what your situation is, they want to help you not only like eliminate and save these taxes and defer them, but then also on the wealth building side and being able to help them, you know, help you grow, help you grow your wealth,
Melanie Sikma:
Mm-hmm,
David Richter:
Because that’s what you really want as the business owner. You don’t wanna just say, Hey, didn’t pay a bunch of taxes, or I paid a bunch of expenses this year. You want to see your net worth grow. So this combination here, like on this screen, or if you’re listening to all three of us here, we can help you get to where you wanna be. So I just wanted to end with that. If you are a real estate investor, you’re listening to this right now and you want to get this help, go to their website and if you need the CFO help, go to simplecfo.com. Like we are here together as a team to get you where you want to be. I want you to have more money in your pocket. You saw, you heard Byron
Melanie Sikma:
Mm-hmm
David Richter:
Just tell about how he’s doing a tax strategy with his mom and you know, like in a different tax bracket. Like these are the things that can actually put physical dollars back into your pocket. So just go there. We would love to help you. We also connect you to them as well. If you’re working with us, like you will be working with them. So I just really wanted to get that out there as well. Remember to make your profit a habit. And thank you Melanie Byron, for being on the show today.
Byron McBroom:
Thanks for having us.
Melanie Sikma:
Course. Thanks for having us.
Outro:
This episode of The Profit First for REI podcast is over, but there are plenty more where that came from. Are you ready to learn how David and his team can help implement the Profit First system in your business? Schedule a discovery call at simplecfo.com right now. We’ll see you next time on the Profit First for REI podcast with David Richter.
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