Revolutionize Your Cash Flow and Achieve Financial Freedom with Rocky Lalvani
Feeling overwhelmed by your business finances? It might be time to rethink your approach! Our guest today has a suggestion – the Profit First method.
Meet Rocky Lalvani. Rocky is a Chief Profitability Adviser for business owners, helping them maximize their business profit and regain control of their time and freedom. He’s also host of The Profit Answer Man & Richer Soul Podcasts. As a certified Profit First Professional, Rocky specializes in implementing Mike Michalowicz’s Profit First System. With his hands-on experience and access to a vast network of profit specialists, he ensures his clients’ businesses thrive like never before. Instead of the traditional formula Sales – Expenses = Profit, Rocky instills a new mindset: Sales – Profit = Expenses. The ‘Profit First’ method is a game-changer for businesses that want to break free from financial constraints and reach their full potential.
Rocky’s mission is clear: to empower business owners to rewrite their success stories and achieve financial freedom.
In this episode of the Think Business with Tyler podcast, we dive deep into the ‘Profit First’ formula, why life is about harmony, not balance, how to build wealth, and the power of setting clear business goals.
Don’t miss this episode with Rocky if you want to transform your financial journey and unlock your profit potential.
💡 Name: Rocky Lalvani
💡 What he does: Rocky is a Chief Profitability Adviser for business owners.
💡 Noteworthy: He is a certified Profit First Professional who implements Mike Michalowicz’s Profit First System.
💡 Key Quote: “Profit is a habit. It is not an event because, for most people, profit is I’ll be profitable when I have seven figures in sales. Sure, you will. You couldn’t be profitable the whole way there? Come on.”
💡 Where to find him: LinkedIn
Profit comes first in business. The ‘Profit First’ mindset is based on an effective cashflow management system encouraging entrepreneurs to put profits first. It’s a practical method that helps businesses achieve financial stability without having to borrow money for specific purposes.
Rocky explains, “Profit first is nothing more than a cashflow management system. It uses an age-old system. So back in the old days, maybe even not so long ago, and some of you might have done this with your kids, you have envelopes so people would get paid, and or maybe they had jars, and they put the rent money in 1 place, and they put the food money in the other place, and they put money for the utilities in another place. And then, when the time came to pay for those things, they actually had the money. What an amazing concept, right? They didn’t borrow it. They took the money, and they paid it. Well, that’s what profit first does. And just to start simply, you just take 1 percent of all your sales, and you put it in a separate account and profit.”
Aim for harmony, not balance. Rocky believes that life is about harmony, not just balance. According to him, you can’t seek a perfect balance but instead embrace the ebbs and flows of life. He says, “I don’t think anyone can live a balanced life. […] So I got introduced to the word harmony. It’s like a song. When you listen to a song at different points of the song, different things come to the forefront. There might be a drum solo, or the vocals come up, or maybe it’s a guitar riff. All of these things are playing around in the background, just like your life. And at different points, different parts come to the forefront. And you do them, and then and then they go back down, and then something else comes to the forefront.”
Build wealth slowly and steadily. It’s a tale as old as times; slow and steady wins the race. We can apply the same concept in building wealth. If you want to accumulate wealth, you need to adopt a patient, long-term approach. Rocky explains, “I think for building wealth, the biggest thing is compounding. I learned a lot from Warren Buffett. One of the things Warren Buffett says is everyone wants to get rich this weekend. Nobody wants to get rich slowly. If you look at how Warren has built wealth, he didn’t have his first billion ‘till he was in his fifties. And it’s because he’s lived so long that he’s actually been able to build wealth. And profit first is a system that allows you to take a small amount of money aside and essentially use it to build wealth.”
Know your business goals. Every business should have clear and well-defined goals. They can help give you a sense of purpose, whether it’s increasing profits or finding new customers. Rocky believes that goals are paramount to success, and he gives an interesting analogy to illustrate his point of view. He says, “I think the biggest thing that’s most important is figure out what your end goal is. So imagine we’re going to go to a football game. We go to the football game. Nobody painted lines on the field. There’s no scoreboard, and there’s no game clock. How exciting do you think that football game is going to be? Not very exciting.”
“How many of you have been told to pay yourself first? Age-old adage. Well, if you’re supposed to be profit, why can’t you take your profit first? Why can’t it come off the top? If your business is profitable, then it should have that excess cash, and it should be removable from the business. Now, all big corporations, many of them, pay a dividend. Same concept. You, as a small business owner, should get a quarterly dividend, your profit, and remove it from the company and go build another stream of income somewhere.”
“Everyone is told you have to spend money to make money, which I think is a lie. When we have a pile of money, we throw money at all our problems instead of being more resourceful and thinking through, how do I solve this without throwing money at it?”
“There’s a lot of wastage going out because employees are trained to spend money to make money. They are not trained to be frugal, and frugal is a good word, by the way. So they’re just not trained to run the organization lean.”
“I need business owners to start feeling their money. And every time they do their allocations, they go, wait a minute. I thought I had more. Why isn’t there more coming in? Or, a lot came in this month. Why did it come in? How come my operating account is negative? It gives you that early warning signal. You start to feel how your money is flowing through your business.”
“Harmony is literally creating the song of your life so that all those things work together because if one part disappears, if the drums aren’t there, the song’s kind of flat.”
“Profit is a habit. It is not an event because, for most people, profit is I’ll be profitable when I have seven figures in sales. Sure, you will. You couldn’t be profitable the whole way there? Come on.”
“Define everything you want and then reverse engineer your way to how to achieve that. And that’s the way I built my business. My business is reverse-engineered. This is how much money I want. This is how much time I want to work. How do I make that happen?”