Fear pisses me off. And it's in a, it's in a good way. It pisses me off because it's like, well, I'm scared. You know, the way to stop feeling fearful is to actually do some Where where things get derailed is where you're in that survival mode. But then you start to think someday. Yeah. I'll be out of it. Right? You know, or someday something will break free. Wolfe, that someday never comes unless there's one day, which is today.
You don't want your kids to be suffering from the issues that you actually did with the child within you or neglected that child within you. I'm not a psychologist, dude, but I read a lot. How to read a P and L. This is stupid, simple. If it's like a rule of thirds, there truly is no business money problem that cannot be solved. By simply generating more revenue. Someone's listening, and they just heard you. And they're like, you know? Welcome back to Gathering the Kings.
I'm your host, Chaz, Wolfe, and today, I am so hyped to bring you this conversation with my man, Rick Jordan. Rick is the founder and CEO of reach out technology. He's a cybersecurity expert that has spoken not only at Nasdaq, but Harvard and can frequently be found on the news giving his expert opinion and knowledge on cybersecurity. Buckle up in this episode because we go deep really, really fast. We're talking about fear.
How to avoid passing on generational trauma to your children and the rule of thirds in business, which he breaks down so beautifully. Please subscribe and follow gathering If you haven't already liked this episode, drop me a comment. Tell me what resonates with you most. Enjoy the episode. Alright, Rick. Welcome to the King stage. My brother, I appreciate you being here. How are you Thanks for being here. Duna. I'm doing okay. I mean, you know, the the studio is, like, screwing up on me today.
So here I am on my desk. I think this might be the second time I've ever done a show from my desk. There you go. We're still gonna bring the energy and still gonna have a good time. 100%. You sound great. You look great. You were just telling me that you were doing some transitions there in the office slash studio. So this is what entrepreneurship is about, though. Right? Like, being flexible? Making things move. I hope so.
I was just talking about a family office that I partner with, you know, for the public company. And they're like, well, this is it. They're like, everything's about to break loose and everything. I'm like, I feel it. You know? And he was saying he's like, this is this is entrepreneurship. He's he's telling me this. He's like a sixty year old dude. And he's like, it always gets, like, up to the edge. You know, like, it, like, and then all of a sudden, everything just breaks loose at once.
That's right. That's right. And the issue that I see, man, with entrepreneurs in specifically. It's like, are you really that committed? You know, or anybody, like, in any situation in life, are you really that committed to see it through? Because you get to the point where it's like, you will get there, but most people fall short, like, literally almost like if I just push another almost 30 seconds, that's it. Yeah. To the point of that breakthrough, and then it would be it. Cheers to that.
I mean, let's let's let's jump right in on that because Yeah. Rick, the this, I mean, we're kinda high level principal, you know, a little bit of woo here, but I I love a little bit of woo. A little bit of woo, you know, but but here's the listener. Touch. The yeah. The listener's like, yeah. Yeah. But but how long do I hold on? Right? Cause there's this there's this balance or this dichotomy of, like, holding on, persistence, but then you miss it.
You miss your goal, but, like, maybe I'm in the wrong spot. What's been your experience? I mean, you're 20 years in, serial entrepreneur. You got just so much stuff that you've done and accomplished. How do you know when to press or when to release and pivot? Yeah. That's a good question, man. And in my mind, I was about to say something, and this is gonna sound humorously sexual. It's not meant that way. I'm just prefaceing it that way.
When it gets to the point, this is seriously went through my head. Like, do I say it this way? You know, because it okay. I'm just gonna throw it out there because this is seriously the way the phrase game on my mind. Like, when it gets to the point where you feel like you're forcing it, that's when you pull out time. And it's a I know it's a it sounds funny, but That's the only time I've ever been like, this is not for me. Yeah. Yeah. And it's because everything else.
It's like that you can put forth the hard work, and things will be difficult. Yeah. But when you because when you get to the point where you just feel this, like, am I forcing this to happen? Yeah. You know, am I seeing all these things around me that say that it shouldn't be the case? Right. You know, and you you can differentiate between those, and that's where maybe experience or discernment comes in place because you you see certain signs. Right?
Yeah. If you just see difficulty, difficulty is not saying you're forcing it. Right. It just means that you might have to learn a new skill set. You know, you you just have to answer that question how rather than the why. That's the discernment of saying, you know, what? It's okay. This is gonna be hard, but I can still push through it. If it gets to the point to where you're like, you know what? I've been shown all these signs that tell me why not, you know, don't do this.
And I'm ignoring them. You know, that that's a different scenario. If you're trying to to tackle the how with the issues that are coming at you versus ignoring the issues that are coming at you and pressing through. Anyways, that's the difference between just pushing through for your breakthrough and then trying to force it. Forcing it Chaz you pull out. Yeah. Yeah. Yeah. I think you did a great job there.
It and even in that, it's like a little bit left up to interpretation because that in that moment, that's the feeling of this It is. Yeah. Yeah. It's I'm I'm either pressing here because I believe, and I and I'm getting some a little bit of feedback, but that difficulty word that you used how how have you and maybe your experience experienced difficulty, but then pressed through? Like, because there's a lot of people that bump up against that, and they go, You know, like, it wasn't for me.
I well, I'm not designed for this. You know what I mean? Yeah. That that's, man, that those phrases that you just said saddened me because they're they're very common. Yeah. They're like, oh, I guess it just wasn't for me. Right. It's like, I I don't know if that's it. I think you just in that moment chose for it to be not for you. Right. And so I've gotta go back and hit that because when you're talking about how do you have that feeling. Right. You know, and it's you do feel it in your gut.
There's a different part of feeling it in your stomach or in your chest. If I look at it in experience, you know, because if I feel it in my chest, it's almost like constricting, and it's like I'm forcing it. So if you think you're like winning a race or something like that and This has been proven by science over and over again. It's like your emotions control some of the feelings in your body. Yeah. You know, and I'm not a doctor. I'll just throw it out that way.
But if it's like, if I if I feel it on my gut, like, the difficulties there Yeah. You know, and I like, oh, man. It's like, you can almost, like, bend ups. I just, like, keep going. It's almost like if you're if you feel like you're gonna puke and you're in a hardcore workouts, you know, which I do work out, but there's been times due to where it's like, man, I feel like I'm gonna puke. I'm pushing too hard today. I'm like, I only got, like, 3 more sets. I think I can do this.
I don't care if I puke. Right. That's pushing through the difficult. It's a different feeling. You don't feel that in your chest, man. You feel that in your stomach and your gut. Yeah. You know, and that gut feeling is like I'm gonna keep pressing. Yeah. But the practicality of it, the non woo woo when I said it's like figuring out the how because if you catch yourself in your mind being like, Okay.
I I'm presented with this problem in a situation that you asked for was actually bringing my company public back in November. You know, the no joke. Like, the deal fell apart eight times Wow. 8 times in the last 5 days leading up to it to where it all just happened. Wow. You know, and every single time when there was an impasse, right, in the in the contracts and the and the terms, whatever. It was a I'd look at it and it and it's like, k. How can we overcome Yeah.
It's like, what's the solution? And I and I despise I was just talking about this a little bit ago. I despise binary options. You know, because if I see 2 things, I'm like, if that's what I'm being presented with, I don't think we're thinking this through it off. They're should be more, you know, because if I see what, you know, if I like the 2 options in front of me, maybe I won't press it, you know, but if I don't like either of them and I'm not asking How can there be a third?
Yeah. You know, I don't like either of these. I still wanna get to that endpoints. I don't like either of these. And if this is the impasse, what's that 3rd option and how do I accomplish it? Yeah. Do you think that right there, that skill set that you just described? Is that only base experience? Is that is that, like, something that you're born with? You know, that that kind of fight until you you see the breakthrough, or is that something that's learned? Did you read it in a book?
Like, how how would the listener be able to grab on to that if they don't feel like maybe they they, you know, have that skill set? Yeah. That's a good question. I if I were to examine my life, and then that's why I looked up into the right. If you're watching this on video, it's like I just, like, started digging into my brain there. If I look back through my life, I know there's moments to where I've suppressed that, and I can tell that I suppressed that.
I think that every one of us is built with that scenario of being able to push through. However, our life experiences have taught us what self limiting beliefs are like. Yeah. That's right. When we when we experience something and, like, like, anybody can go back and say, like, that was a bad point in my life. You know, I don't think anybody that's listening has had a life without struggle, probably varying degrees of struggle.
You know, like, I can go back and be like, yeah, my dad died when I was sixteen, or, you know, I was laid off. From my job right when my twins were being born. You know? So it's like that there's there's big moments and milestones in the life, but it's like, those 2 options. It's like, what's my choice? Right. It's like there's almost no choice in that. You're given a non choice in those scenarios. Yeah. And that's why it's always it's like, okay.
Well, if I don't actually have, like, option a or option b, it's like, where where what else do I need to do? What do I need to look for? It's a curiosity because it's either, like, give up in life period. Right. You know, it's what some people do. Yeah. You know, which is very sad, or how do I move forward? Because I don't think that being stuck is something that anybody was born with is something that's okay. Yeah. Yeah. It becomes just part of the way that they're thinking.
You you talk a lot about fear just in some of your content that I've I've followed you on. And Yep. What would you say that like, this person that is connected to this, like, maybe the contentment or the giving up. Is that associated to fear in your It could be. You know, a lot of that is, and it it's based on previous experiences like we're just talking about. And it's interesting you talk in it because I I think I just had some episodes post about this too. You know, fear pisses me off.
Yeah. And it's in a it's in a good way. It pisses me off because it's like, well, shit. I'm scared. You know, and a lot of times, it's like, if I'm this scared, then I gotta get over this, you know, not get over the fear, but the only way to solve fear is action. Yeah. Which means, okay. Cool. How do I the way to stop feeling fearful is to actually do something Right. Yeah. And you might not even know what that something is.
You might not even know what step 7 is, but you might know what that first step is, dude, and you might not ever know what that second step is until you take the first step. Yeah. It's like, what when you're in a fearful state, whatever you can do, you should do. And where do you feel fear? That's a question for you. It's like, when I think of fear, it's like, when I was talking about to feel it in your stomach, You feel it in your gut. You don't feel that in your chest.
It's like, that's the thing. It's like, oh my god. It's like, you're bending over. You go into fight or flight. It's like, cool. What happens with fight or flight? Both of those are action statements. Yeah. You know, so it's like, which one are you gonna do? Are you gonna run away from it, or are you gonna push through it? Yeah. Give me give me your thoughts on this because everything that you just described, Stephen Cottler talks about in the art of the impossible where he breaks Oh, yeah.
He was the guest of my show. About for the book with the release. Yeah. Exactly. So he he breaks down, you know, basically, you know, especially some of those active sports, or action sports that he was a journal on. And you talk to those guys and they have fear too. It's not like those guys don't have fear. They just lean into. A lot of it. Yeah. Yeah. But there there's other element that go into things that we fear that we shouldn't fear at all. Like, they are fearful to us, but shouldn't be.
What are your thoughts on that? How that's different, maybe? I think of a I think of reality, like, what's actually real in the world versus the reality that we create. Yeah. Yeah. So it's, you know, if something happens one time, it doesn't mean that's gonna happen every Right. And I think that's where those those patterns kick in. You know, I've done I've done my own studies on this. I've talked about it on the show before.
I don't think Stephen Coddler talked about this, but every time it's just like a like a like a muscle, you know, every time I lift, you know, I build, you know, so that's why it's like, I like by the way. There you go. You know, that's why I've got some decent arms, you know, but it's the same thing with your with your mind because as soon as you think a thought the first time or you experience something for the first time, a new neural connection for us. Right.
You know, and the more you go back to that same thought, it strengthens, you know, even in the in the diameter of that new neural connection within your brain because it continuously stays active. That's right. You know, so if you don't think about it again, or you don't accept it as one thing means everything, then that thing stays completely weak and it gets broken down.
It it's It's hard when you get into these things because if you experience multiple traumatic things, you know, we'll say, like, within a couple weeks time period. You know, Chaz that's very real stuff because it's very it's very mental Chaz neurological and that's the thing breaks up. It'll take a a lot more effort to break it down again. Yeah. So when it comes to thinking that one thing is gonna mean everything. That's just not the case. So what's what's actually real?
You know, so if you it gets tough too, man, because if people don't believe the truth when it's like staring them in the face, it's because of that. Yeah. And we can have compassion for those things too, especially for those individuals because it's like they've experienced some pretty deep shit. Yeah. Likely. You know? But then there was also some choice beyond that to continue reinforcing that on their own. That's right.
You know, so let's have compassion form in those moments at the same time. It might be somebody you also have to be like I'm gonna help you over here until you want me to be closer and help you from right next to you to help you break that down and form a new neural connection, a new narrative within your mind. Yeah. I love that. We can rewrite the story. This is a great transition. You, I don't know if it was recently or sometime you posted. I'm gonna read your quote here.
Fix the broken child in you so you don't break the child that comes from you. Dude. Yeah. Dude. And so this this piece that you're talking about as far as rewriting, I mean, first off though, you said I had to address it. I I don't wanna, like, maybe dwell on it and keep that neuro pathway alive, but but we have to address it. Talk about this. Yeah. It's intriguing Chaz there's a lot of stuff that we passed on to our kids. I have 3 kids. I have two sixteen year olds now, a fourteen year old.
And I think back to when they were young, and it's like, I'm grateful because I dealt with a lot of stuff in my life even before they were young. Yeah. So I didn't pass on weirdness to them. You know, there's some ways I did, you know, but thank god that we can be self aware and we can help and get out of that stuff too. You know, but I start to see them as as really like your kids are reflections of you.
Yeah. You know, and being a dad is one of the greatest things that I've ever had the opportunity to be in my life. You know, I mean, even this last weekend when my kids were all in layman's are up, know, which is a hardcore musical dude. You know, all three of them in lead roles. Wow. You know, and watching him go through Chaz, and I got tears running down my face because it's my favorite musical to begin and now they're in it. It's moving anyways, but now it's them. Seriously.
You know, it's like my daughter comes up to me and sixteen years old and still hugs me after. You know? Like, I don't want it to be done. She's crying. Who she's like, who cares about her friends being around, man? Yeah. Definitely. She doesn't care because she's still expressing love and still showing. It's like, dad, you're my safe place.
Yeah. You know, so if you're not that, if you're always in a that position of, like, fighter flight, you know, having that fear that's with inside of you as a parent, your kids are gonna sense dude. And they're always gonna be nervous around you because they're never gonna know which way you're going to turn, what emotion you're going to express or lash out on. Because of those issues that you have.
So, you know, it's like you don't want your kids to be suffering from the issues that you actually did with child within you or neglected that child within you. I'm not a psychologist, dude, but I read a lot of shit. Yeah. Well, and and I would put myself. Great phrase. I'm gonna put that on there. That's my next quote that I'm putting on on social. I'm not a psychologist, but I read a lot of shit.
Yes. Well, I I think that, you know, a lot of us live in that lane where we're just trying to find the the next best version of ourselves. And sometimes it's it's a sentence like that that unlocks it where you're like, oh, okay. How do I address these things? And so for you, I I heard you say in there, there's quite a bit of maturity around how you've been around your children.
What what's been your you know, looking back now 16 years of being a dad, what would you say to the the dad mom entrepreneurs listening right now who are trying to balance all not only just the emotions of it all, but the actual business and the life and all the things. What what have you done well? Yeah. That's a good question. It's always the same answer. Proximity. And even having twins when I was born when I when I was born, when they were born, Yeah. That'd be a trick.
Yeah. Even having the twins, it's like, if I needed to go buy some deodorant, right, from the local Walgreens or CVS or whatever it is. Even when they were two months old, you know, I'd grab one of them and just take them with me. Like, well, what does it matter? They're not gonna know, and it's like, I believe the opposite. You know, and and even with that, it's like I'm setting up a pattern, a good habit for myself, because that's how I wanted to one of it to always be. Yeah. And no joke.
It's like now, any of them, you know, 3 kids. If I just say, yeah, I gotta go get some deodorant. Hey, dad. Can I come with you? Like, they they reciprocate now. You know, no other reason than just to hang out. Yeah. You know, just to have that that proximity. And some of the best conversations due to what my kids have always been in that 5 minute car ride. Hold on. Yeah. Proximity is the key dude. That's the that's the number one parenting tip I'll give to anybody. I love it.
What do you think has been challenging around proximity or just being a parent Wolfe, well, if I talk about the the current phase that I'm in, like, I was talking about Lima Zarrab right this last weekend, my daughter, I know I'm biased, but at the same time, she freaking awesome. All of my kids are. I mean, the voice, it's like she can hit a for anybody who's a musician. I am. Like, she can hit an e 6. Actually, she can go higher Chaz.
E 6 is the note that the chick hits in Phantom of the Opera, which is, like, next to impossible for a lot of women to hit. But then her acting is there too. You know, So she's like, she's been saying this for 2 years. And at first, it's like, yeah, whatever. You know, I'll support you. Of course, I will. However, you know, let's see if this is something she wanna do, which she says moved to New York when she's 18. Wow. You know, and I'm like, for what?
She's like, because I wanna go to theater out there. I wanna be on Broadway. Yeah. And the whole time, I'm like, oh, shit. She's got the chops for it too. So I'm like, this is this is real. And that's the difficult part in this stage because even though, you know, I'm not that dad and their mom's not that mom, where it's like we wanna keep them in the nest. You know what I mean? Keep them around the house.
You know, it might have been strategic for me to buy a company in New Jersey right across the river. That way I can just play. I'm gonna meet you for lunch. You know, and I'll stop there too. I'm from Chicago, so it's like, it's an easy flight. You know, no problem. I'll be there every week. Oh, they'll take you to lunch. Whatever. It's like dad. I'm like, she she's like, no, seriously. Like, come any time. You know, that's, again, the the relationship.
Yeah. Seeing that now, and it's like it's getting closer to being even more real because now it's only like a year and 4 months away Yeah. From them them turning 18. And I I still think of them. You know, those moments where I said they were, you know, like, like, like, this big, like, £6, you know, because they're born £6 5 and, like, just grabbing them in their, in their carrier and taking them with while I go get deodorants.
Yeah. You know, it it's still I don't dude, I don't reflect back on those moments ever. And think, man, I wish we were back at that time. Sure. Or I wish they were still five years old. You know? Because first, I just think that's stupid. I think that's incredibly selfish because then it's not it's saying, like, there was one phase of their lives, you know, or a parenthood for me. Chaz was more fun than the other. Right. It's like, I'm grateful because, dude, I I get to do it.
You know, I'm the one Chaz that gets to be that dad throughout every season of their life. Right? And even Pasadena. It's not like it ends at 18, and that's what keeps him to go on Sometimes it gets a hold of me. I'm like, oh lord, it's coming up, right? Where she might wanna move to New York, you know, in a year and a half, but then it's like, hey. I get the supporter during that time too. Yeah. Like, like, her dreams, like, real deal with right in front of her. You know?
Yeah. It's like, I got a big network. Who could I call? Yeah. I'll get you on stage. You know? So let's do this. I will support you. That's cool. There was a, a banker friend of mine a couple of years ago that turned me on to an app called parent queue. And all you gotta do is you put the your kid's name and their date of birth and it literally gives you the amount of days left until they turn 18. And you wanna talk about a sobering app. I don't think you'd be present real quick. Oh, no kidding.
I mean, right? Because I'm not gonna dump. No. I mean, I appreciate you. You only got a certain amount of days. Well, all have a certain Exactly, Joe. Not gonna still induce some anxiety there. Yeah. 1 1 year 4 months. I mean, I don't know, 400 days. Or so. It's just like, when you when you when you put that in your mind, you're like, oh, okay. This is really important. I should I should take this moment to have them come to get deodorant with me, at the store.
So I'm gonna switch Gotta say dude. I'm not trying to break a train of thought, but this is kinda fun doing it here in my office. Yeah. Because it's, like, see. Usually in the studio, you know, it's like, and I'm always on anyways. It's like, what you I tell him, you know, I've got 78 employees now growing in the business. And I'm like, Like, you're the same. And I'm like, I know. I'm like, I'm the same on camera. I was like, I'm off camera.
There's not a character, you know, but there's like an environment to where it's like the studio. You see some of my content, and it's like, driving. You know? It's like, I get to bet I feel a little more chill. There you go. And, again, you got your scotch, so we're all Chaz well. Hey, Kings and Queens. Jazz Wolf. I wanna to you about something that's super important to me. We put a lot of time and effort.
We, meaning myself and my team, into this podcast, into the content that goes out every single And if you have been getting any sort of value or insight from this, we want it to be able to reach other business owners too. So we would love if you would like comment, share, leave a review, post, share again, all of the things on social media, on all the different platforms, or even on the cast mediums of Apple and Spotify.
We would love to be able to get our content into more hands, more entrepreneurs so they can grow their business as quick as Together, we are building a community of like minded entrepreneurs who are committed to growing their businesses to new heights. So let's do this. Let's help each other grow. Alright. So I'm gonna transition gears on you. You you've got a little, you know, business building rule of thirds that you've used. I wanna dig into your mind on this. The financials of a business.
Yeah. Specifically for service based, and I and we got a lot of those companies that listen, but all different other types. So Give us what the rule of thirds is, and and we'll we'll dig in here. Yeah. It it's pretty cool. I'd I love teaching on this stuff because it's when you go through, building a business. You know? And I was I I just had this conversation because I I acquire companies now. Like, that's my big strategy. You know?
Sometimes it's difficult for sellers to transition to employees. Yeah. You know, because it's like they were the wrong boss for so long. And sometimes in the back of your mind, it's like, and and this is why you didn't scale. Right? You know, and I don't mean that condescendingly. It's just sometimes it's like, I I wish I could just shake and be like, wake them up. Come on. When they're when they come on board, it's like, why do you do this, Rick? It's like, well, I have principal.
Let me tell you about one of my principles, which is the rule of thirds. Yeah. Especially for service based businesses, as you said. Right? Because it there's different areas of finances. And this is where I actually get to show my chops. Right? So my business acumen too, there there's top line revenue, of course, but then you have cost of goods or cost of sales, say, means the same thing. That is the amount of money that you put into actually delivering your services.
So this can be several things. This can be materials. You know, if you have, you know, odd bowl materials that you need to use to deliver the services, this can be SaaS products, right, depending on the service that you actually utilize to deliver your service. You know, I I think of like a if it's like a a mortgage broker or something like that, because a mortgage broker is a service pro. Here. That's all that they are.
You know, they're delivering the end product, which is actually a service of being like I'm consulting you along the way to get you the best mortgage deal. But if they have that that loan processing application, you know, that that SAS app, that is a cost of goods sold or a cost of services because you can't deliver your service without that. Yeah. Or like in a true service based business, it would also be the cost of labor to deliver that service.
You know, not the bookkeeper that's sitting in your office because that's just overhead, but literally like a technician or, you know, a a a carpenter Chaz an example, you know, would would be somebody who is active in their wage 100% is required to deliver that service. So that that's cost of goods sold. It's amazing then on how many business owners I've come across that don't understand basic financials. Oh, yeah. And it's it's it's not difficult to understand. Exactly.
Yeah. When you break it down into this, it actually makes sense. And I I think back, it's like, well, anybody remembers radio chat. You know, when I was when I was 17, I was I was in the radio shack manager training training program. Okay? And they gave me a store, a $1,000,000 store 3 days after my 18th birthday. But during that management training with radio shack, they taught me how to read P and Ls. Yeah. And then even more so, they they said, hey.
The what you get bonus on is your net operating nothing else. It's actually really simple. Your bonus comes off of how profitable you are. And they're like, you can control 90% of the stuff that's on that P and L. We give you the authority to do so, which means the amount of I kept the ordering, the the labor that I allowed to it, like, the percentage of labor in the store. I got to control everything, dude.
Made a lot of money when I did that too, but I I think back and I'm grateful for that time period, but it wasn't much. It was like a day teaching you how to read a P and L. Know, and they never thought about it this way, but I'm like, this is stupid simple if it's like a rule of thirds. Yeah. Because after that cost of goods sold, if that's a third, Yeah. You've got your top line revenue minus a third. Now you have your gross margin. Right.
Yeah. That's what you are making before you have other expenses. Other expenses like rent, right? Yeah. Office space or the utilities that go with it or internet service to provide Chaz. Depending on the Yeah. Computer. Exactly. Yep. Which also can be an asset on a balance sheet. You know? But all of that overhead, you know, if it's a vehicle that you drive, you know, lease under your company that you're not, like, my BMW doesn't go out to service customers. You know?
You know, my ass and Martin doesn't go out to service customers. Chaz NASA a little bit ago, but that wasn't something that I could classify as cost of goods sold. Right. Marketing, I could. Oh, yeah. Because I took photos with it. You know? But but I'm not driving out and Right. You know, fixing a server, which I don't I've got awesome smarter people to do that now. You know, just pulling up on my BMW. It just doesn't happen that way.
And there's other line items like cell phone expense and all of these other things that go into overhead. Yeah. Or that bookkeeper that I talked about, that person is overhead. Yeah. Because you could actually outsource that if you wanted to. That's another third. So overhead is another third, which is also called SG And A. You know, sales goods and administration. Now sales general administration, sorry. So if you have a third from top line revenue, deduct Chaz, that's your cost of goods sold.
This is a good principle to follow because then you can always maintain roughly speaking like, a 67% gross margin, right, at a minimum. You know, I've run companies that have been in the eighties. Sure. As a as a gross margin, you know, but 67% because then you can remove another 33% for your cost or your SG and A, your overhead expenses, And then you're left with your net income, which should be around a third, 33%. That's a good margin to run a business off. That's right.
And if you get really good Chaz an owner, you should plug in your salary into the overhead or the cost of goods sold and still be left with that net operating income of around a third, which, you know, around 33%. Then you can actually take half of Chaz, my suggestion. You can do it with whatever you want. You're the owner. Right? But you should take half of that and reinvest it back into the business.
Not only is it is it good for taxes because you're you're spending more, but you can look at half of that when you're left over. To invest in new assets. You know, may maybe it acquire something to deliver new services, add a new service to your to your portfolio, maybe hire a salesperson, something that you can tie directly back to generating more top line revenue. You can't do that if you're running a 10% net operating income. Right? You just can't do it.
If you can structure it in the role of thirds and you still have a third leftover after you pay yourself as an owner, you can take half of what's left and reinvest. And that's what fuels your growth. I love it. The simplicity of the rule of thirds, I think, is incredible, but as you're basically describing, keep these things well organized, and there's a lot of moving pieces in a service space or construction business.
But if you can just think of it as, Rick was just describing there, you know, your top line, your middle of the of the sheet, and then your bottom. I mean, that's a a really simple way to think about it. What do you think the impact somebody listening right now. Just by the way. What's that? So I think some lives were just changed, by the way. I've had that happen when it freaking love it, dude. That's what that's what fuels me. I was just getting ready to say it.
Like, someone's listening, and they just heard you. And they're like, you know, what do they go do? With that information. You know, Wolfe, first, you hit the point right on the head, man, is that you've gotta get this stuff classified. Right? You know, and if you can't do it, go get somebody to do it. You know, I actually have a I have a chart of accounts, kind of a standard chart of accounts.
I'd be happy to share with the viewers, you know, I've done this when I've coached people and everything, but it's it's a listeners. I don't know. Are we listening to? Or we just, you know, people? I love it. It's, You never know nowadays. You know, because there's so many things. It's like my team gets me booked and I love it. I get great great team and it's like, okay. Is this from live? Is it recorded? You know? Now I just don't know, so I just dump into it.
Like, let's, you know, let's crush this. Yeah. I know. Right? So, yeah, the the practicality of that is you have to start class buying things correctly. Yeah. You know, because it I've heard this cliche phrase before. It's true. I hate cliches. You know, but it's it's just out of principle because I'm a little bit more of a disruptor in a rebel. But the cliche of, like, you can't manage what you can't measure or what you don't measure. Right?
You know, that that's very, very true, especially in the case of finance. Yeah. So when you can actually see where you're at, you can start to make the adjustments. Yeah. And even more so, you can start to make predictions. When you have those numbers in front of you because then you can actually plan for that growth out in the future, or you can plan for certain things. Like, what there's been times, of course, any business owner, even reach out. It's We've had cash flow shortages. You know?
But then we can, like, project things out 13 weeks and be like, okay. Where's the tough weeks coming up? With what we expect for what's going out compared to what we expect to what's going in and how do we need to adjust, or you can start looking at 6 months out and be like, Okay. I'm actually seeing some more work, which means I need to hire some people now and take that half and reinvest it to train some new people immediately So I can fulfill this new potential revenue 3 months from now.
Yeah. Yeah. If if you don't if you don't have this down somewhere, there's no way you can analyze it. Yeah. You're so right. I wanna I wanna press on this a little bit because this this forecasting, specifically around, like, cash flow and and and difficult times, again, going back to this rule of thirds, you know, that works for service based, really, for all companies, but the service providers listening right now and they've bumped into like, oh, there's not enough money there.
Crap. Yeah. Right? And so what you just gave them was thinking ahead in in 12, basically, which is a quarter 12, 13 weeks, or even 6 months, give me your mindset on that. Like, as I'm looking forward, I've got projects that are still yet to come in and money to come in. I'm calculating that in a timeline. Of course, I'm projecting out my expenses in the way that you just gave cogs and then the administrative and then my net.
Anything else I'd be thinking of there as I'm overlaying these things over a 13 week or a you know, 26 week period. Yeah. For sure. You're seeing some problems, and it's I laugh because I thought I'm gonna quote one of my board members and advisors for years. And whenever I've been like, dude, it's like, I'm seeing some some difficulty on the horizon here and everything. And he'll just say, Rick, go sell some more shit.
Yep. Yeah. And I'd be like, That's so simple because, you know, there truly is no business money problem that cannot be solved by simply generating more revenue. As long as you're with good margins like you already gave us. Exactly. Yeah. And and even in the moments, because, I mean, there's times to where it's like, okay. I need this quickly. Yep. You know, because it's like, if you have accounts receivable, you know, because most of the stuff that we do as a service providers on autopay.
But then there's some things like projects, you know, so there was a a time to where was like a new acquisition. It was like a $4,000,000 acquisition, but it had ballooned that subsidiary to, like, a $1,000,000 in AR. And I'm like, this cannot be. Right. You know, so so when I when I think about that, it's like, that means that's a full quarter because it's 25%, right? That's a full quarter of the year, literally 3 months of delay in cash. It's like, what do we need to do for this?
Because then it's like, how Chaz we push? And then another board member's like, dude, just call people and be like, I'll give you a 5% off if you wire the money in the next 48 hours. So when you're talking about good margins, it's like, sure. We're generating more revenue, but sometimes it's also okay to take a small little hit so you can actually get that breathing room you need.
Because there there's a lot of emotions that go into that stress that's provided by a cash flow shortage on the business. Oh, yeah. Yeah. Yeah. How am I still gonna make payroll? How am I gonna fit hit my payables, you know, because I I got my credit line max with the distributor. How am I gonna pay that? Cause I got orders that are being held you know, and that's like Chaz when you start to look at that, it's like, comes back. His name's Kingsley. It's like, I'll go sell some more shit.
Yeah. Yeah. And you're so right. I think that the caveat there that you gave, which is, you know, go sell more stuff, but it's gotta be the right type of stuff. I think Chaz I I've lived my life from a sales background of, like, sales solves everything, except if you're selling the wrong stuff. And so I think that you a great job here given us that distinction. And so why do you think that that's difficult?
Cause there's a lot of business owners, even the ones listening right now Chaz either are in the middle of a cash flow crunch or have experienced it even this year and going, okay. Yeah. The reality is I was just talking to one of my companies. The leaders just 2 days ago. And I was like, okay. Well, we can we can do this. We're looking at the projections and, you know, moving things around. It's like But do you know the answer? Go get another deal. Right? And so I love it.
Yep. It literally has always been. So Oh, man. What what's the dude, this was like during COVID too, and that this I started to hate the word pivot. You know, it it's it was it was legitimately, like, the thing that I was I just would be infuriated by every time I heard that, you know, and that Chaz was I still get excited in even with even not being in the studio, yeah, I'm getting yeah. Exactly. So passionate about not using this word because I think it's a cop out.
You know, because I I I think it's more like moving aside the real problem, not addressing, but like, I'll just go over here. Yep. You know, so there are times to where it is the wrong stuff. You know, and that probably comes back to our forcing it or or breaking through scenario that we were talking about earlier. You know, but a lot of times, It's just you're probably not just charging enough money for what you're delivering.
Your pricing's off, which actually comes to a mindset problem in and of itself because you don't understand the worth that you have in there, unable to articulate the value you provide to your customers in order to get the price that you need. Yeah. This this plays out in that company I was just describing to you. It's a it's a new company. We launched it last year, and our pricing based on estimates that we then executed on projects were too too small.
The margins were too small, but we didn't know Chaz. Until you get down the road and you're like, ugh. This is really tight. Why? Why? Why? You start realizing that those thirds weren't in play. They weren't they weren't in right order. They weren't in right proportion. And so I think that's for every business owner, and I'm gonna lead this into you you talk a lot about start up to scale, and so that's kinda where I'm headed here. But a lot of those startup modes is like, look.
We just gotta go sell something. Yes. We gotta go take we gotta take really good care of it. Because if you just squander it, then you might as well not have even done it. But Yep. Yep. A lot of times, especially that run ramp that you were just talking about, if you can give yourself some breathing room. That's why a lot of, you know, whether it's raising money or or getting a working capital. Like, all it all it is is I'm buying me time.
To go sell enough and create enough systems and hire enough great people to where it takes off. You know? Would you agree with this? Talk a little bit more on this. For sure. Yeah. Absolutely. There there's a There's a point. And I fully believe in being able to analyze your expenses and your people with that too, because when you're taught talking about, you know, do we do we accelerate revenue, or do we cut back on expenses. Right. I think the answer is generally speaking in that order. Right.
You know, because it's even as I acquire companies, I always say I'd rather do more with the same than the same with less. Right. Yeah. So when you're taking a look at at your specific scenario you're proposing, Still, the answer is always do another deal. And at the same time, when you do that other deal, then you can reinvest and hire more people like we're talking about earlier. Sometimes, A lot of times, really. I'll I'll put that caveat on there.
A lot of times, you always have the right amount of people as Wolfe. Because if you can focus on the efficiencies of those people rather than hiring new people, you can do more with the same, and you become scalable that way. You know, so processes, procedures, you know, and it's a dude, I get it. I mean, even, like, looking back when I started to reach out, you know, it's like, especially in the case to where it was, you know, twins being born. No job. You know, like, whatever.
It's money. You know, I I need it right now. Yeah. Whatever the price I need to make in order to get this deal fine. You know, but then there was still a strategic plan because at that point, it was quite literally survival. Yeah. And I don't think, you know, most people listening or watching might have had a moment of that in their life, you know, maybe a couple of moments, but that's not perpetual.
Yeah. That is not all the time to where it's like you're in this crisis mode of survival to literally put food on the table to buy formula for kids that were just born. And pay a mortgage of the house or get it out of foreclosures. You're not evicted from that home either. Like, that that was a stage in my life. Everything I just described. Yeah. It wasn't continuous and perpetual. Yeah. That's because I said I'm doing what I need to do right now, and that's valid.
Dude, that is totally anybody who's less like, understand that that is totally valid Chaz you should do what you need to do right now and understand that what you're doing right now is not what you should be doing 6 months from now. Yeah. Because you should have broken through whatever it is and figured your shit out, at least by that 6 month mark, to push forth into the next phase of that. If you're in a mud pond right now, dude, it's like, cool. It's like first foot outs. Right.
You know, it's like, awesome. It's a different strategy to get the second foot out. Yeah. Yeah. We were just in Nashville. I told you this past week with some of our clients, and Jeff Goins is a top New York Times bestseller author. And has ghosts written many, many of the probably our favorite books, incredible, incredible author. So he had dinner with us, and he was giving us this, the story of how he got lost literally in the woods.
And what he basically described was that he just had to keep moving. And eventually he found a street, and it was you know, in the middle of the mor air middle of the the the the night, like, 4 AM, and nobody would pick him up on the side of the road. Finally, the cops finally picked him up because, you know, he looked just deranged and and Chaz. But the re the the the piece that Look. Look. I know.
It was kinda Chaz, but the piece there for for us as a takeaway was that you have to you have to have hope that I'm gonna get out of it, right, get out of the scenario of survival, but I have to have a realization that it may not be right now. It may not be today. So, like like, there's this this back and forth of hope, like, Yeah. I'm gonna find a way out. I'm not gonna always be in survival mode because there's people listening right now.
They're like, dude, I'm trying to buy formula or whatever it is that you were just describing. Yeah. But then also holding on to, like, it's not gonna happen today, but I'm gonna put my head down and take two steps forward today. And then eventually, I'll get out. Can you speak to this as far as your own example? Yeah. That's the difference, though, man, because you're you're still talking about doing some. That's right.
You know, because I I Where where things get derailed is where you're in that survival mode. But then you start to think someday. Yeah. I'll be out of it. Right? You know, or someday something will break free. Right. Well, that someday never comes unless there's one day, which is today. And then tomorrow, it becomes that day. When you actually take whatever you Chaz. Those two steps in that moment to be able to do something, and it may not feel like it is.
And usually, Usually, it doesn't feel like you're out until you've already been out for, like, 3 months for real. Until until you look back and you realize, like, oh, It there. Everything's okay. And you know what? It's been okay for a little while because I did all these things. And this this is the same with, like, cash flow stuff too, man, because it's like, If you come up to it right now and you finally think it's like, oh, this is gonna be horrible.
Like, I'm facing this dire circumstance today? You know, what can I do? And it's like the answer when people ask me sometimes it's like, well, do you have a time machine? You know, that's my question. And they're like, what do you mean? You know, like, because I need to take you back to 6 weeks ago because you focused on that someday, not the one day. Right. And that's why you're in this predicament right Sounds good.
So 6 weeks ago, we would have been tackling, like, the real problem of how you got into it, but now we have to deal with, like, 18 more problems because of where you're at now. Yeah. Because it became that someday rather than the one day 6 weeks ago. Yeah. Do you think that's a delay in that example, or is that a belief issue? Like, why does that someday happen Chaz opposed to thinking, no. I'm just gonna I'm just gonna do what I can today. And one day, I will get out of this.
There's a lot of reasons, man. It's, you know, procrastination is one of them, you know, and I've always said, like, procrastination is really like perfectionism in disguise. You know, but it it's a symptom of a greater thing, and the greater thing is really refusing to look at what's actually in front of you.
And we talked a little bit about that earlier, you know, because a avoidance is, I mean, you can call it, like, partly depression, or or anything like that, but it's the awareness and really more like the acceptance, you know, of most likely the choices that got me here are actually the things that got me here. Versus something else outside an external happening to you, which can happen. Sure. You know, and of course, it can.
It's like a Like I said, my dad getting leukemia, you know, the whatever. It's like that. That's that's definitely something that happened to me, dude, you know, and it happened for but it's not like the Tony Robbins thing. It's like, you know, I like Tony for the most part, you know, but at the same time when he's like, yeah, life is happening for you. Not to a you or whatever. And it's like, there there's no knot. It's more like an and.
Sure. Yeah. Because there's real shit that really can happen to you. Totally. You know, and it can happen for you. Yeah. As long as you're not ignoring it because it's only gonna happen to you, not for you, if you're going to ignore what's actually sitting in front of you. You know, and in those moments, it's like, start to start to look around, start to anchor yourself. If you have kids, cool. You were probably placed on the search specifically for those kids at stuff that I believe. Right?
Those were meant to be your kids, even if it was like a whoops And it just came along. It's like it's like, that's still your kid. Yeah. You know, it's still a purpose that you have right now. The people, if you're in a business that are working for you, like, I I've got Oscar, my assistant, my PA right there. It's like, I I fully believe that there was a reason why we came into contact. With each other. He's the one that brought me the scotch. That's the reason today.
You know, but but there's there's there's more reasons Chaz that. You know, so it's like, what can I do for him? It's like, is that there's There's so many other things, and I I I try as much as I can to place almost, like, place obstacles and difficulty in front of me. You know, or or I Wolfe rather say, you know, rephrase and say place challenging situations in front. Right. Yep. Because it's it's like, I wonder what's gonna happen.
You know, if I do something like this, it's like, it's almost like picking up a book to me, for real, because it's like, I can read about the knowledge. The other option is be like, How would I just do something when most people would think would be stupid? And then in that point, I'll be like, yeah, it wasn't so stupid. Look at how much I learned. Yeah. Look at how much money I made off of this, you know, because it's all it's just like, whatever it is, I know I can handle it.
And in those moments where you're like, I'm gonna ignore it, take a look back at the things that you've already done. Those are your anchor points. And be like, I've already achieved this stuff. And that once you start seeing those happen, it if you're ignoring the part to where it's like, well, it's never happened. You know, and it's like, maybe I was forcing this. Right? But if you can find the 1 Yeah. The one where it actually did work.
Mhmm. You know, it might be unrelated, but it actually did work. Maybe it's just that question of how. Yeah. Yeah. Our minds will fill in the blanks. Right? If we find that one example of winning, our minds do a really good job of helping me figure out how to win on the next thing Chaz long as I can believe that, hey, I've done this before. Why not? Why why couldn't I figure this out? It's good. Okay. Looking back, I got one last question here. Cheers. Exactly. There you go. Cheers.
Wolfe, well, cheers to one one more thing here, Rick. You've obviously had a successful career and successful family, all these cool things we've got to discuss today. But if you could roll back the clock and talk to the younger, Rick, whisper something into his ear, what would that be? Yeah. Don't wait. It's, I waited a long time, and I waited to the point to where it's, like, Chaz non choice that I was talking about. I'm glad I made the right choice in that non choice moments.
I wanted to start something, you know, if you wanna go on my own, whatever years before I actually dead. Yeah. You know, and and a lot of it is comfort, and that's why that was a learning period. Right? So if I look at I don't wanna say I wasted 6 years because I I got a lot of good Good experience during those times. I met cool people. You know, I was the first agent in Geek Squad in Chicago during that time period too, you know, which which kinda, like, led it's become part of my story now.
Yeah. You know, from being like a Geek Squad guy to having a public company, you know, in cyber security, So it's it's become part of the story, but it's like, if if I take a look back, it's like, those years, I always wanted to do something. Yeah. You know, for entrepreneurial and I wish I had not waited. That's that's bad because that's a that's an state without statement without compassion.
You know, But I can reflect on it in the learnings, and it's like there's 3 things that I completely believe in now whenever any situation approaches. Yeah. When I said don't wait, it's like, those three things are calm, confident, never hesitate. It's kind of a code that I live by because course, you work backwards like time kills all deals. You know, then there's also opportunities that can be missed.
Yeah. You know, and those become moments where you actually should grieve you know, because you can look back and be like, you know, it's people believe that things come back around, you know, and I I do for the most part, but, like, you know, the woo woo stuff. Right? It's like, Oh, if it's meant for you, it's gonna come back around. Reality is sometimes it doesn't. A lot of times, it doesn't. Exactly. Yep. So now you can look for the next opportunity, but it's gonna look a lot different.
Yeah. You know, it's never gonna be that exact same thing again. Yeah. That's why it's like calm, confident, never hesitate. Yeah. What I didn't hear is urgently rush. Hurry up quick. You're gonna miss. I heard poise, maturity, and and some of those things come from experience, like you said earlier in the show, but Yeah. I think that the listener can take away even just some of your formulas here and go, okay. Like, how do I practically just make really good choices?
That's, in essence, what this has come down Yeah. There's a lot I could probably quantify and sell the course. I don't wanna just say that. But it's Well, add you to the Google Assistant. Just how I live. Yeah. It's awesome, man. Well, how can the listeners find you and get connected to you? How can they follow you? All of that. We'll put it in the show notes as well, but give US for the listeners. Yeah. Thanks, man. It's a I'm most active on Instagram at Mr. Rick Jordan.
You know, there's a there's nice links in the bio. You can do anything with me there, but DM me. I I'm in those all the time. Cool. All the time. You know, otherwise LinkedIn, you know, if you're on the business side, I'm active a lot more on Twitter these days too ever since going public because it's like all the all the shareholders follow you on Twitter for that reason. Got it. There you go. Well, you heard it first here.
You've been incredible in your journey, but also here today, you've given us really some really cool stuff to think about. I appreciate the agitation of thought, as I like to say. And I just really wish you nothing but success and all that you're doing and with the new deal and the kiddos thinking about you know, all the cool things that they're thinking about associated with your daughter. Well, really. Thanks for sharing it. I appreciate you. Thanks for being here. Thank you.
Thank you for listening to gathering the Kings today. Hope that you were able to pull out a few nuggets to go apply into your business right away. More importantly, though, I hope that you're realizing that it takes more to be successful than just being by yourself doing it all on your own, carrying the weight all by yourself.
What I have realized not only in my own journey from multiple businesses in multiple different industries and now interviewing over 2 or 300 other very successful 7, 8, and 9 figure business owners is that it's tough to do it alone. And so gathering the Kings exists to bring together successful on nurse.
In fact, we are putting together 1000 kings, specifically who are grateful, but not done We're intentionally assembling kings who fight tooth and nail for their business, family, and communities, and here's what we believe Chaz in the pursuit excellence in those areas Chaz it ignites within us the responsibility to govern power and forge a lasting legacy.
So if that relates and resonates with you and you know that you need people around you, sharp, qualified, other very successful business owners. I want you to go to gathering the kings dot com. I want you to take a look at what we're doing and see if it makes sense for you to be part of our pursuit to 1000 kings. Talk soon.