Episode 135: Profit First Lessons From A Digital Marketer with AJ Aluthwala
The Profit First REI Podcast
December 5, 2022
David Richter
Summary:
Profit First isn’t just a massive benefit for real estate investors—it can benefit any business across various industries.
To show you just how valuable the Profit First method can be, we’ve got AJ Aluthwala joining us today! He is an app developer, co-founder, and CEO of KallistoArt Online Marketing, a company that helps develop high-conversion websites and mobile apps for other businesses.
AJ is also a big advocate for the Profit First method! Listen as he shares his story in this episode.
Key Takeaways:
[00:43] Introducing AJ Aluthwala and His Projects
[03:54] AJ’s Money Struggles and Profit First Journey
[09:57] Why AJ Implemented Profit First Right Away
[11:30] Some People Live Paycheck to Paycheck Because of the Lack of Knowledge in Financial Management
[14:46] AJ’s Journey Into Entrepreneurship
[16:42] AJ’s Years of Entrepreneurship Before Profit First
[19:04] How AJ Restructured the Business With Profit First
[21:08] What Money Lessons AJ Wants to Teach to His Kids
[26:31] Persistence and Adaptability: AJ’s Keys to Success
[28:18] Connect With AJ
Quotes:
[09:37] “When you have $0 in your bank account, it’s very easy to implement all things.”.
[12:08] “A lot of people like myself have not really been schooled, or [don’t] have school about managing money, or don’t have the background about money management.”
[17:19] “When things aren’t going right for you start seeing shiny objects, and then you start running after shiny objects… And that’s what happened to me… Because [of] all of that, I was introduced to Profit First. And out of that, I was able to take profit first seriously.”
Connect with AJ:
AJ’s Website: https://www.aja360.com
ElleApps Website: https://www.elleapps.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:
AJ Aluthwala:
I was introduced to Profit First, and out of that, I was able to take Profit First. Seriously, if I wasn’t in that place in life, I might have not even taken profit first. Seriously,
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:
Here we are, we’re at another episode of The Profit First, sorry. I podcast with AJ Aluthwala today. He is an app developer, but the secret thing is he’s also a raving profit First fan, because it literally has saved his business and changed his life. He says that several times in the episode. You can hear his journey because he was, he was emotionally invested in a business and that business went south. So he tells that whole story, it is heartbreaking, but then he got out of it. That’s what I love about this system, is that this system helps you no matter where you are, get to a better place if you’re at rock bottom or if you’re at a good place and you want to go better. And he tells about that. He goes from emotionally low to emotionally high, his start as an entrepreneur, what he teaches his kids now, now that he’s got the Profit first mentality and mindset and what he wants to pass on to them, he also tells about his keys to success because this is a very successful entrepreneur that I’m involved with, with several masterminds that I am privileged to have you hear from him today, and I hope you enjoy this episode.
Hey everyone, this is David Richter again. Here we are with AJ Euth Walla. I am super excited. I’ve met him at several masterminds that we’ve been a part of, and he’s an overall great guy. And in the tech space, he does apps, he builds apps. He’s gonna tell you a little bit about that and how you like to select an app developer. We’re gonna get into some cool things like that. But he is also a Profit First fan. That’s why he’s on here. That’s why that’s one of the stipulations of coming on the show. And we were even talking about that before, he got on here today. So AJ it is awesome to have you on the Profit First REI podcast.
AJ Aluthwala:
David, thank you so much for having me. Pleasure to be here.
David Richter:
Yeah, well, thanks for coming on, and I can’t wait to hear your story because you told me that 2016 kind of changed your mindset a little bit. You read a book back in 2016 that kind of changed your perspective on money, so we’re definitely gonna get into that. But I wanna just ask you, what are you working on today that excites you? Like what is, what are, what excites aj? You know, like what are the things that you love doing?
AJ Aluthwala:
Absolutely. so, we are right now working on a, project where, which we think will revolutionize the way yachts are sold in this world. Bought and sold we are working on this latest platform where people will be able to, our marine brokers will be able to know, put their yachts, for sale on there, and then closing agents will be able to, close on yachts very easily. All the docentation, everything is in there, and we are planning on rolling that out within the next, few months. So that really excites me because I’m a 50% partner in that business.
David Richter:
Very cool. So it’s almost like real estate invested, but with yachts, I’m sure if you’re a real estate investor that may have crossed your mind that you would like a yacht in the future. It sounds like AJ’s gonna make it a whole lot easier. Sounds like almost a title company app, you know, like for, for the yacht, the Yacht Ownership Club, which would be a very cool club to be a part of. So if you’re listening to this, AJ’s definitely someone to know there. But let’s get into it. Let’s, let’s go down your profit first journey. So in 2016, you read the book, like, talk about maybe before that, like what money struggles have you had in the past, and why would you even pick a book up like that Profit First or like what even got you down that path?
AJ Aluthwala:
Right. So, David, I thinking, I gotta tell the story here. So, back in 2016, I had, I was in New Orleans with the wholesale business, then I was involved with the retail business, and we were losing money. I mean, you know, 5,000 bucks. So, you know, whatever the nber every month we were, we were making bunch of money, but then we were losing money on the other hand so we were just being a pass through entity. So, I had to pretty much close down that business. I had to, you know, borrow money from friends, family, even my wife. It was that bad with that other business. So that was a, crude awakening for, for, for me to really grow as an entrepreneur, to grow as an investor because I wasn’t invested in that business. But that, you know, it, I made that investment for the wrong reasons.
Mm-hmm. <affirmative>, it was not nbers driven. It was an emotional investment because I was trying to help someone, you know, do the thing they wanted to do. So what happened was, since all my energy was pulled towards that retail business, which was flopping month after month, my online marketing business, kist was doing really poorly. I mean, I remember one time I actually had to go to the bank and put 50 bucks of my own money into my bank account, bank of America bank account, because the bank would charge me 35 bucks on late fee. So I can’t even remember what, but it was charging me money and I didn’t have the money in the account, right? So it was a rude awakening. And I, and I knew that I’m, I’m, I’m good as an entrepreneur, but I was horrible when it comes to accounting.
And I still think that I’m not that great, but I know that, you know, that’s something which I really need to pay attention to, making sure you get your money right. Because as entrepreneurs, we are all about making money, but we don’t think about keeping the money, right? Yeah. It’s all about making the money. We never think about how do you gonna manage the money. We are all about making the money, but we don’t, we don’t think about how to divide the money Yeah, right. To preserve it. Wedon’t think about this kind of thing. So, I was listening at, remember if I remember right, to a Mike Dillard’s podcast, self-Made Millionaire at the time, and one of the, you know, the OGs, right? So, and, and, someone came on, a guest came on Mike’s podcast and mentioned Profit First.
And I went to Audible, bought the book and listened to it while I was working out during my lunchtime over a few days. And I mean, I remember while I was listening to the book, there were certain segments where I would just, you know, stop doing what I was doing, whatever my workout, and I would just, you know, sit in a corner of the gym <laugh> at a UFI and just listening to, or, or rewind and listen to that thought, you know, one more time or two more times because it was such powerful. And I had a huge emotional connection to what I was listening, because that’s exactly what was going on in my world. My world was crashing down on me. My financial world was really crashing down on me. So I knew that I need to do something different. I cannot expect the same results by executing on the same, money management, I’ll call them techniques, but they were really not the money management techniques I was employing because obviously, they were not working for me.
I was, you know, I mean, I was really in a bad position and profit first really, you know, put everything into perspective. even to today I use profit first in my business, in my businesses. And, I make sure every dollar we get, we put it into the right amounts of different bank accounts, not through accounting, because everyone thinks that how you can do it through accounting, but that’s really not the case. If you see money in a bank account, you’re gonna start using it, right? Mm-hmm. <affirmative>. So, you know, we’ve started doing it and it has been really wonderful for us.
David Richter:
So when you first read that book, did you implement it immediately and you were just like, I have to do this? Cuz we’ve had some people where they read the book and they’re like, it makes them sick to their stomach and they’re like, I don’t know if I can do this. You know, like, I don’t know if I want to implement right away, but did you go down and like, just, were you one of the ones where you’re like, I get this, I want to implement it, I wanna get this in as soon as possible.
AJ Aluthwala:
Absolutely. I actually implemented it immediately because I have hit a rock model, right? Yeah. When you, when you have $0 in your bank account, it’s very easy to implement lot of things,
David Richter:
Right?
AJ Aluthwala:
Rights very easy. And, and I think, you know, people get into, the dilemma with the implementation because now they have, you know, bunch of money in these. So what we do with this money right now, do I need to transit here and there? But I didn’t have that problem. I didn’t have money, right? So I was able to implement it, very quickly. And Profit First talks about finding a bad bank
And I was able to do that, right? Nice. So for your, profit account and your tax account, which you only touch once a year, right? Either account, profit account, you only touch it when you want to pay yourself a bonus at the end of the year, maybe during Christmas time or whenever you wanna do it, right? Just once a year. And then the tax account when you had to pay your taxes, right? So I went looking for a bad bank and it’s very easy to find them so a bad bank, which doesn’t have all their, you know, their guess their platforms set up right? it’s extremely hard to do business with them. <laugh> Yes.
David Richter:
So,
AJ Aluthwala:
So people normally shy away from these kind of banks, but I was able to know, find a, a credit union and, I obviously want to know name names here, but, able to know, find that, and they have got, they, they are still in existence, but, they have like, think they got bought by someone else and you know, they name change, you know, whatnot. But, yeah, that’s kind of, you know, how I implemented immediately did it.
David Richter:
So, sounds like it was a mess before, like the finances, you knew that’s not your core genius, you know, you’re not the finance person, you’re the entrepreneur, you know, that’s what you do. Why do you feel like a lot of people get into that scenario as entrepreneurs where they don’t know what’s going on, or they’re living paycheck to paycheck, almost like back in a W2 job. Why, why do you think that is with a lot of entrepreneurs out there?
AJ Aluthwala:
I believe the reason is because, you know, they’re just entrepreneurs, right? You know, they’re not money managers. Yeah. We get into the entrepreneurship because we see how we can make a change in the world by employing our skill set and bringing a team together to start offering a product or a service to others. But what we don’t think about is how are we gonna manage the money we are gonna be generating out of this endeavor? And lot of people like myself have not really been school or doesn’t have school about managing money or, don’t have the background, about money management. Maybe you never had, anyone in your family who was in business. I did not. I literally do not have anyone in my family, even in my extended family who has ever been in business, everyone worked for someone.
So, you know are been, you get to that pay paycheck to paycheck mentality, right? So you go and work for 40, 60, you know, amount of hours, and then you get a paycheck, you don’t even have to think about it, you know that it’s gonna hit your bank account at the end of the month. And, then you just take that paycheck and pay all bills and, you know, whatever the little bitty, amount which is left, you throw it onto your savings account. Yeah. Right? And that’s how, most of America lives. That’s the sad, situation of the society we live in. I think changes are coming, however, those changes are slow. I know that in, state of Florida, they implemented financial literacy, just, the governor just, you know, signed paperwork.
So that’ll get implemented as a class, which I believe is fantastic. So kids get, some kind of, some kind of an idea about how to manage your money, right? Yeah. Because we, we don’t have that. We are not, we are not, you know, we don’t grow up with that. That is, I think, you know, that’s the reason why a lot of people who get into entrepreneurship ends up either being broke or, just mismanaging. So you are are never rich. You are always doing a job or working a job. You just, you know, stay where you are, all throughout your life because they don’t, they don’t learn how to manage their money.
David Richter:
So you said an interesting thing there. You said that, well, most entrepreneurs of course, don’t have a background in finance. Like, they’d rather like shoot themselves in the foot than like go to an accounting class. But you also said too, a lot of ’em when they first jp in, don’t have a background in entrepreneurship either. And, you know, they don’t even know how to run the business, they just know they’re good at the thing, and we don’t get this training in school. So I wanted to ask you said a lot of people in your family had just, you know, worked for someone else, or like, so then what made you different? Like, why did you wanna start businesses? Why did you wanna be the entrepreneur and, you know, like make a difference and impact and, you know, create solutions?
AJ Aluthwala:
So the answer is very clear and, it’s very short because, you know, I sucked as working as an employee to someone. So that’s, what, so, you know, I had, I programmer who sits behind the cubicle, you know, code do coding away. And I, again, I really sucked at it, you know, I wasn’t the programmer you want to have on your team. So I stayed, I got away from it. I knew that this is not something I want to do for the rest of my life. And then, I, slowly, you know, switch gears I started doing jobs, which are more on the sales side or the marketing side. I, did a, MBA, majored in marketing, back in, late two thousands. So that’s where I was able to make that switch from that technical background to the marketing background. And then from there onwards, I knew that I can become a sales guy and the sales guy becomes the entrepreneur. That’s kind of how my entrepreneur journey happened.
David Richter:
Awesome. And what year was that? When did you start that official, you know, like down this entrepreneurial journey?
AJ Aluthwala:
The officially I would say in 2006.
David Richter:
- So then, so then it’s like 10 or 11 years later, right? When you first read the book Profit First? Yeah. So like for those first 10 or 11 years, were you paying yourself? Were you just swimming in the dark? Like what, describe those first 10 or 11 years then in the, without that,
AJ Aluthwala:
So those, they, they were really know swimming in the dark type of situation that, you know, we, yes, I was paying myself, but you know, I know, it was again, where you make the money, then you pay something to yourself and you obviously pay all your bills and pay, pay something to yourself, and then you are all over the place, right? So it, you know, it wasn’t a good, scenario for anyone to be in. And when, then you start seeing this, you know, shiny objects too, right? You know, when things are not going right for you see, you start seeing shiny objects and then, then you start running after those shiny objects. And that’s what happened to me with, getting into these other business where I saw these shiny object always trying to help a friend, with the shiny object.
And, you know, I treat it as a learning opportunity, you know, it’s never a failure. It was a great learning opportunity for me, because out of that, I was introduced to Profit First, and out of that I was able to take profit first. Seriously, if I wasn’t in that place in life, I might have not even taken profit first. Seriously, there might be so, so many people who are listening into this podcast who have heard about Profit First, they want to implement it, but they’re like, yeah, I’ll do it next week. Or, you know, I’ll, I’ll, I’ll get to it. I’ll first have to, you know, pick up the book. I had to read it and, you know, I don’t know whether I have time to read it. all these things, which goes in, in your mind. So I would say, please pick up the book, start reading it. And there’s an awesome book called Profit First for Real Estate Investing. So read that too. There you go. <laugh> and, that will change your life.
David Richter:
Awesome. Well, there’s a huge endorsement right there. So there we’re just gonna stop the package. Just kidding. So thank you for that, and I know that, and it was definitely a long journey when you got there, even when you started implementing it though, you weren’t the finance person. Now, I believe you work with a mutual friend of ours that has helped you with, you know, like, or you know, people in our circles that have either helped you with this or on the financial side. So what was the light bulb for you there? Like, did you find someone that could help you implement eventually? Or did you have someone that could, you know, like walk you through this system as well too? You know, like during the years of implementation or eventually later on you were like, Hey, I need an audit of this. Like, what was that journey as well, you know, like for having someone on the team who was that financial person, so you could do the entrepreneur job,
AJ Aluthwala:
Right? Yeah. So, we, you know, the mutual friend we have, you know we didn’t, officially know start anything with, with that mutual friend, but, this, this was really a self-discovery process for me. And, you know, it’s, for me, you know, it’s, it’s something which is very, very easy to implement. Yeah. you just have to get your mind around it, right? And, what we try to do is, if we get into the details, every dollar we get, we divide it into the few pieces, and send it out to the right kind of, you know, accounts, the, the profit account, the taxes account, the operating expenses account, and then you pay for your, I mean, the account where you are gonna pay yourself right. To your salary or your owner’s pay account. Yeah. So we were able to implement it ourselves, and we were, we, we talk about it with our, with the, with the folks who are profit first implementers. And that way we can maybe, you know, get some ideas and maybe, optimize the way we are doing it we haven’t used someone outside of our organization to implement it.
David Richter:
Awesome. Well, I just wanted it there because that, that’s, it seems like a lot of people have the entrepreneur bug. They always have someone at least on the inside helping them a lot on their journey as well too. So I totally get that aspect of it, cuz it’s like, do we, you know, like we’re the entrepreneurs, we gotta implement this, but we need that help. How about, let’s shift gears just a little bit, kind of along the same path, but you said you didn’t grow up like in a family that had, you know, like that worked for other people, you know, it wasn’t the entrepreneurial type family. But then how about now, like, passing that on to the next generation, you know, because I believe you have children, correct?
AJ Aluthwala:
I do. Yeah. I got a son Panada.
David Richter:
Yep. A son and daughter. So what are you wanting to pass on to them that you’ve learned on your journey that you wanna make sure that they’re picking up?
AJ Aluthwala:
That’s, that is a great question. So it’s all about the future generation, right? You know, we know, everything we do is really to, shape the, future generation. You wanna make sure that, you know, your legacy stays not just your next generation, but maybe several generations in your family tree. So, I remember when my son was maybe five or six years of age, I will take one of his little, hot wheel cars and we will do a little dealership, right? So <affirmative> actually, we’ll get two cars here, two hot wheels, red car and yellow car. And then there’s a Lego character who’s the sales guy, right? And then here’s another Lego character who will come over and ask for one of the cars and they’ll go for a test drive. They come back, the price has gone up. So basically <laugh> basically, giving them the idea about how to be comfortable around money, right?
Yeah. Making money. A conversation about, is a easy conversation within our household we have, we have already made that, when, when, especially when, for kids, it’s very hard to understand what is money mm-hmm. <affirmative>, right? The easiest way, at least from my experience, is for them to understand money is to make them sell something which is like a maybe do a lemonade stand and, and, it’s a, it’s, it can be a fun experience, but at the same time, it can be a grueling experience where a lot of you are waving a lot of people, but no one’s stopping by <laugh>. Yeah. Right? Yeah. So here’s your first entrepreneurial journey or trying to do lemonade stand. No one’s stopping by, they wave back at you. They just keep on, going past you. And when you are done with the day of running a lemonade stand, you come back and you click your money, say you’ve got $20, right?
And say you got $28 for the 28 lemonades, which you had to make and sell. Maybe some people gave a bunch of extra money that, but that’s, you know, besides this the point, right? So 28 lemonades, so that’s how I started talking to my son about money or dollars. This one lemonade is, think of it as a dollar, right? You know, how hard it was to get to that $28, how many lemonades you have to sell. So if we are now to go and spend 28 bucks on this Lego set, that’s how much you have to work to earn that, right? Yeah. So this gives them a great perspective. Ah, okay. It’s not easy as just pulling 30 bucks out of your 28 bucks out of your wallet to pay for it, but you gotta make this money, right? So, we, we, I’ve done that with my son and, I also bought hire this kid.com, back in the day.
And, Preco, you know, we’ll go from, we’ll go to, local businesses I know, and, my son will do a, a business review video of that store, and he’ll get paid like a hundred bucks, which is kind fantastic. Yeah. We’ll come and, you know, throw that video on YouTube and we have a YouTube channel called, hire This as well. So, we’ll do that. And, I think, you know, that really give him an idea about, how to manage money. Now he’s into Pokemon cards and again, there’s the money factor right now, the money factor as well as the point system in Pokemon cards. So I think, you know, compared to how I grew up, I think in today’s world, kids have more opportunity to learn, learn about money on it. I, unless they are, I mean, I should say they, they had the opportunity, but if you hand everything out to them, then they’re never gonna learn about it, right? Yeah. So you gotta do it in a way where they understand the value of the money, which you are earning, and then the money which you are spending, and the money you are saving.
David Richter:
Okay, well I love that. That’s so good. Which this smer we’re doing lemonade, staying with my daughter, which I’m super excited. She’s finally old enough, she’s five years old, she’s finally grasping that she’s alive, you know, like, we can do something here. So yeah, that’s encouraging to hear from me as a father, and I’m like, I love this stuff. I ask those questions mainly just so I can know what I can do to, to help pass on what other good people have done too. Which leads me to one of my final questions, being a successful entrepreneur, what would you say is one, one, or two keys of your success on your journey so far, would you say?
AJ Aluthwala:
I would say that, you know, the, persistence, in trying to make an idea a reality, that has really helped us and then, being open to ideas, in doing things differently. Sometimes you start as say, for us, you know, we started off as a website development company, but now we are doing more on the mobile apps and web apps. So, you know, you have to shift gears and change things, but you gotta be persistent on what you are after. But, be, you know, have the ability to, change gears as you know, as time goes and, and, and we need psoriasis.
David Richter:
Awesome. There you go. That’s, that’s good. Good info there because that will, you have to have that persistence. You can beat everyone else out if you could just keep it, keep going, keep going when it gets tough. So this has been an awesome episode from where you told us at the beginning, like 2016, kind of hitting that rock bottom and then building yourself back up with better systems, better processes and profit first in place. I did love that when you said, you’re like, I had to do something different. You know, and like you even told in your story, which also came full circle at the end there with you saying like, do something different. Like be persistent going through that and telling your story. I absolutely love that when you started your entrepreneurial journey and then the things you wanna pass on to your children, like being comfortable talking around, you know, around money and talking about it.
I love what you said there. It’s like, let’s normalize the conversations, especially in our own household about money and like what we can do with it and do. So I absolutely love that. So I wanted to say, because you’ve dropped a lot of good nuggets here today, is there any way our listeners can provide value back to you? Like where can they go to learn more about you or connect with you? And I know you build apps as well too, so if people are looking like you’ve got a great idea, you know, you would probably wanna run it by AJ. So how do they get in touch with you?
AJ Aluthwala:
Yeah, they can get in touch with me by going to aj a three sixty.com and click on the, contact button and all my social media channels out there and my phone nber. So feel free to reach out to me through those. And also go to apps.com, that’s www.elleapps.com and there’s a tab called free gift on the far right corner. Click on that and you’ll be able to get access to a white paper, which has few things, which you should, think about when you are, when you are hiring a, mobile app developer to for your next mobile app project.
David Richter:
Awesome. Well, thank you so much. So we’ll make sure those are in the show notes. Go to www.elleapps.com to get that free information. That’s good info. If you’re ever thinking about getting, that will be good questions to ask. I always love that whenever we can ask better questions. And that is, you’re going down that rabbit hole of building an app that makes sure you know the questions you need to be asking when you start working with someone who actually does that or a living. So then you know whether or not it’s gonna be a good deal. Here we go. So that was good stuff. Thank you so much, AJ, for being on here today. It was an honor to have you. Thank you for also sharing your journey. That was incredible as well too.
AJ Aluthwala:
Absolutely. David, thank you so much for having me. I really appreciate
David Richter:
You. So if you are listening to this as a real estate investor and you’re like aj, where you’re like, Hey, I’ve either hit rock bottom or I never want to hit rock bottom like that, go to simpleCFOsolutions.com, click the schedule call button, make sure that you at least talk with our team. There’s no obligation to work with us. We just wanna get you to the right place. If we’re the right place, we’ll help you and we can make sure that you avoid a lot of those situations, those dark scary situations of running outta money and having to go to the bank, all that stuff. But if we’re not the right solution, we also have a lot of good people in our network that we know, that we trust that can help you as well too. So, because we wanna do all of this, because at the end I always say this, we want you to make a profit, a habit in your business. So make sure you go out there and do that. If we can help you, great. But remember, make profit a habit in your business.
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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