CounterMeasure – The Profitable Estimator Podcast

on the eyes of an accountant

what should be the number that should be reflected

in an estimate yeah

so when we are looking at estimates

you definitely want to know

like all your material costs

you want to know all your labour costs

and have that worked out

the biggest thing that I find is that people don't

then put enough

so sometimes you wanna win a good job and everything

so you sort of cut into your

but you're then at risk you know

if things do blow out

we've been in a very high inflationary environment

short on labour so just means that costs go up

so welcome Lawrence uh Petruzzelli

a legendary accountant in sunny uh

Queensland to uh

the Profitable Estimator podcast

how are you yeah

doing well thanks

thanks for having me on how are you going well

it's a pleasure yeah good

it's it's a pleasure that you um Kim

uh on this episode and obviously the way we uh

start our conversation is

would love to know who our guest is and who's uh

Lawrence Petruzzelli behind the curtain from uh

running this uh

successful accounting partnership MTV uh accounting

so yeah yeah

so I'm an accountant by trade

I'm really interested in businesses

I do look after a lot of businesses

so I really like

that aspect of what I do

is more in the business advisory space

but outside of just the normal accountancy stuff

I do a lot of content creation

I like to educate people on

increasing the financial education of all Australians

and I also do a lot of content around street

interviews on my social media

which has been getting quite a bit of traction

so I enjoy doing that

cause I just wanna bring more awareness

so people start at least thinking about their numbers

their wealth and what the plan is

no matter if you're working for someone

if you run your own business

if you wanna look at getting into an investment

whatever it is I think it's really key

that people start looking into their finances more

cause otherwise you know

there's so many people that are quote unquote

after your money on you got the mainstream media

which is constantly negative

whereas

I think that we have a lot of opportunities here

you just need to educate yourself

and sort of don't listen to the SBS and the ABC okay

well that's

that's one of the key aspects of this session

is to get that insights from the likes of you

and here we are

we're gonna peel the curtain a little bit more on

your background cause you were involved uh

before with construction industry

so tell us about a bit more of that please

yeah so I have done a few different things in my time

so before becoming an accountant

I had my own business in photography

but I was also in engineering as well

so there was

some crossovers with a lot of infrastructure

work in the Talco industry

and I've also um worked in HVAC and electrical as well

just during my time as I was like doing my studies

and then into it

support and infrastructure around there

and then into accounting

and then the really cool thing about

with the accounting

and even with sort of the family assets as well

they're very heavy in property development construction

done everything from a single apartment

Airbnb

to even just looking over a few things from a 60

room motel uh

that was completely renovated into self contained

short stay apartments

so bit of dibbling and dabbling in all that

plus a lot of my clients that are

in the construction industry

in the trade industry that I do look after

and ensure that their businesses are profitable

and they're not paying too much tax

that's it that's it

well um

I really like the idea of um

you've delved into different aspects or facets of

businesses business types that you

you work into and obviously where your background is

is combination of the things that you've done

in the past

and how you help out different walks of life

or let's say businesses that you

you deal with and majority

more of your clients are actually businesses

right yeah

yeah especially the ones that I personally look after

I mainly just work with businesses okay

okay and we always we

we see your

your nice videos that you do out there interviews

just to chat on on how much people know about taxation

obviously it's a short clips

things that you you try to enlighten everyone else

but let's dig deeper a little bit

on what exactly should be the numbers

that a tradie should be looking at

or tradie or a builder should be looking at

cause there are two aspects in here based on I mean

as an estimator there's two coins

two sides of the coin

when you're actually doing estimating from both ends

but on the eyes of an accountant

what should be the number that should be reflected

in an estimate yeah

so when we are looking at estimates

you definitely want to know

like all your material costs

you want to know all your labour costs

and have that worked out the biggest thing that I find

is that people don't then put enough buffer in

so sometimes you wanna win a good job and everything

so you sort of cut into your buffer

but you're then at risk you know

if things do blow out as we have seen with

especially with

we've been in a very high inflationary environment

short on labour so just means that costs go up

so if you quite up a job and then you know

12 months later um

depending like when the job starts and everything else

if you don't build those contingencies in

or at least have something to allow

those material costs go up

or if there's a delay in the project

to have some sort of sunset clause

or some sort of contingency there

where it allows you to reprice or have um

you wanna just have yourself

covered for any cost that could go up in the future

rather than a lot of people

they just wing it unfortunately

they just go hmm yeah

that's

that sounds about like X amount of dollars on a job

and if it's a small job then like yeah

fair enough

you're not gonna go into the details and the ways

but if if it is a big job like if you get 100,000

200,000 dollar contract um

that's where you really need to know your stuff

cause yeah a variance of 5

10% there can really make or break you um

versus if it's a smaller job

a little bit of variance here or there

or if you lose a little bit on

on that job you're not going to be out of business I

I think that's where you really need to especially on

on the bigger work that's where you really need to um

sit down and go through yeah

how much is my materials how much is my labour

what's the timing on it what are the yeah

what's the best case scenario

what's the worst case scenario

what's the most likely then go with the most likely

but the issues a lot of people do is

try to think of what's the best case scenario

what's like the cheapest I can get my materials

what's the cheapest I can get the labour

I'm optimistic about my my workforce

how fast can they you know

do the job and and get everything else done

and yeah unfortunately

people are people

they're not perfect and you're gonna have yeah

sometimes where people are great and sometimes where

yeah some jobs where they sort of blow out

so

that's where those contingencies are really important

yeah just I just say just go

just go through and just in detail

just write everything out

get all the numbers together and just yeah

try not to miss any

any parts or just go I think or I feel cause yeah

you're thinking your feelings aren't the actual numbers

now the follow up question is

how often your clients actually come

comes to talk to you about do we adjust our numbers

or how often they actually look at say

or even referencing or inferencing the information

the profit and loss statement towards their estimate

yeah

so that that is one area where there is a bit of lack

I'd say

especially with a lot of small to medium businesses

the larger ones definitely do

but in those cases

they got like an internal finance team

and their role is just to go through those

those numbers constantly

so it is a little bit harder for smaller businesses

and they're the ones

where we do a bit more advisory working and get in the

in the weeds with them from our perspective

we do look at more of an overall

rather than a project by project um

I have sort of given a bit of advice around

for some of my clients to yeah

start looking at their numbers a bit more

project by project

so they can track which projects are making money

which projects are losing money

but ultimately when we're looking at things

we're looking at more like a month or a quarterly

basis of the overall business health

but that

but that's made up from all your different units

so every single project the profit and loss on that

then ends up going into what your gross profit is ah

cause we look at yeah what

what the gross profit is

after you've had your labour and your material costs

and then we've got the general

cost to operate the business as well

so that's how we sort of break it down

so you got your revenue that comes in

then you got your

basically your cost to deliver that service so

um that's material and labour

and then you got your general operating expenses

which are fairly fixed

depending on the size of the business

but that would be you know like your advertising

your director and management salaries

your accounting fees staff amenities

uh travel costs

any vehicles uh

any any sort of plant and equipment and

and your capital expenditure uh

depreciation that would be on there as well

so that's sort of how we differentiate it all well

truth be told there's a lot of um

tradies in in builders we also encounter that um

who often we ask with this three set of questions

and predominantly

you know what they respond everything else is like no

right so one of the key things that probably I mean

we wanna share out there is that

when we often ask a question

how often you look at your profit and loss statement

a lot of people would actually look at

and come back to us in such a way

they'll say my bookkeeper does it okay

and oh

and how

I mean what when the last time you look at it and say

when the that answer sounds like that

that technically

it means they did it on an annual basis

now when you ask them let's say oh

well we submitted our bass okay

more likely they

he knows that there's is actually quarterly

but when someone actually responds to us

that saying that they're

they're look at it every month or sometimes every week

okay we know that per that

that owner or let's say the finance or the

the manager estimating manager

or let's say director is on the dot in the money

the next best best thing that obviously

that's not been encountered for or accounted

typically would you would get say no

is when do you also update your pricing

and when they say that I say well

when every year every six months

so here's another issue that they encounter

then the third question would more likely be

the answer is already no because they say

so now since you're looking at those numbers

how often you also update your price files based on

are your

your estimate based on the PNL and your pricing

and here they are they'll actually confess and say oh

I haven't talked to my accountant yet

so is that often the case

yeah yeah

it it is one of those things

cause the issue that you have is a lot of people

you know they'll look at what the cost is right

and I just think um yeah it's gonna cost me

more money to have more meetings with my accountant or

cause what I do like when I price up uh

packages for my clients I normally give them hey

we can catch up on an annual basis

we can catch up on a quarterly basis

or we can catch up on a monthly basis

now they're gonna be different tiers in price

so I

I never force anyone to do what they don't wanna do

but the biggest issue that I find is that

people are very much thinking

it's an extra cost to the business

but what they don't realize is

how much is it costing them by not having

an expert go through those numbers with them

because if they have an expert

go through those numbers with them

and like what you said

they can iterate faster and change their pricing

because they might be losing money for like

even just say they catch up quarterly

they might be losing money for 2 months in a row

and then when they have that quarterly meeting

they finally go oh yeah

I need to increase my prices

they already lost two months of um

projects and and depending what your price

and then what other things you got in the pipeline

whereas yeah if you look at your PNL monthly

and the awesome thing is like

you don't even like

you only need an accountant to go through it with you

if you don't really understand what's going on

but once you've had someone go through to you

and show you how to read a profit and loss

how to read a balance sheet

you can then run the reports yourself

it's it's very easy these days

we're quite lucky with technology and cloud accounting

cause we only use zero

we don't really use any other software

I don't really recommend many of them um

we do recommend like using other add ons

and like project management tools and

and all that that integrate into zero

but on on the accounting side

we mainly like to work with zero

the business owner they can just go in and run

a report and as long as the books are up to date

that's where you can look at it weekly

monthly

and you don't need to pay extra for that accountant

but you should be involved and not abdicated

cause I think the biggest red flag that you said

when my bookkeeper looks after it's like

when your bookkeeper sure

they prepare all the numbers

they make sure that you comply

they make sure that your bass is there

and that you pay your taxes and all that

which is yeah

we don't want to get an order from the government

but let's be real here

they don't care about your business

like they care about doing their job

they care about serving you and

and getting everything else done

but they don't care about how much profit

you're making this month or next month

and if you're not willing to

you know pay for that extra meeting or whatever else

like the other person the other client

who's paying three times what you're paying

for those monthly meetings and everything else

they're gonna get priority and yeah

cause we've got a business to run bookkeepers

accountants we've got a business to run just like yeah

other businesses got a business to run

if someone came to you and said

I'll give you $10,000 to do X

y and Z they're gonna be put ahead of someone who goes

I'll give you $1,000 just to yeah

do all these other things um

so yeah so I

I think that's where

you need to find a good accountant

or a good bookkeeper that can really work in

show you all the numbers and everything

but just be ready to see it as an investment

rather than an expense because investing in

really knowing your numbers

will make you more money than what it will cost you

at first it might feel like oh

it's a bit of a sting but trust me

everyone that I've worked with

where we've done monthly meetings

I've just seen their businesses grow

and their profits increase

because often times

a limitation that they encounter is that they just

like you just said

it's about the expenses that they see upfront

but the hidden cost of not understanding

your own numbers with someone actually even took

I mean

or checking or looking looking out for you saying

what happened to the cash flow

where did that money go or with that project

what's going on so

I know there are accountants

who are proactively looking at job to job basis

or project basis but here it is

the the reality of doing estimate is one side

but actually projecting the the cash flow

that's another thing which is obviously

that's the part that once an estimate is done

the project has been won

that should be the number that you should work on

in such a way that you could protect that approach

or the typical

the typical scenario of Maverick spending

are you familiar with that

yeah yeah

so more likely people would just

what do you get when you get to um

for example

when you get to a shopping and to to shopping right

and you have this some of money on your pocket

you're not gonna think anymore

more likely

you'll think about how to max out that amount

because you see that number

but if the approach is more of like

hang on profit first take it out

remove that money now

we're only looking at this amount of money here

that we can we can work on for example

like one of the books I really love the book of um

Katie Marshall right profitable uh profit first yeah

right one of the things that she said was

you gotta look at it like a toothpaste right

cause if you have if you have a full pack of toothpaste

more likely you squeeze that bit and you

everything is just goes to waste

but if you have a lesser space on that toothpaste

and you even squeeze every ounce of it

now more likely you'll maximize your money

so putting that in that perspective in that regard

so having an account like

you obviously

can actually really solidify where's the finances are

what are could be the expenses that should be done

it can be only used accordingly

because one of the key things

that we do notice is that

a lot of clients we work with don't even understand

the overhead expenses

should be covered in every hour of every labor

that a that a trainee would work for them

so and I think that's one of the

one of the key things that we've been

we've been friends for a while and and

and I've seen so many so many companies that you

you help out probably

just to delve more on how you yourself

guided some clients to

from let's say from a newbie or so

let's say a really new new

new trade company just started to to

to become eventually grow

can you share some some story like that

yeah definitely

I had a guy um

he's he's actually more a little bit in um

sort of maintenance um

so we we sort of went vertical

but now he does so he's actually in um

at first he wanted to do lawn mowing

and then I said to him

he was working for a pool cleaner

and he was basically doing all the work

and I was like

why don't you just buy the pool cleaning company

of that guy

was like more

this is more

like the maintenance and repair side of things as well

and what I said to him was

purchase the business of him

because you're doing all the work

the guys like off there

trying to start up some other business

so sometimes it can be good to start off

if you can purchase something

and he paid about $60,000 for it

which was all the equipment and everything got a loan

um

based on the so the business owner that was selling it

so seller finance so

he just paid it out of profits over a two year period

but he grew that from $80,000 a year

revenue to quarter million dollars

by just dedicating to it

hitting up all the real estate agents

and doing all the maintenance work

but then also you know

re repricing them as well

cause I said to him that just increase all the prices

there's a shortage of people there

they're screaming out for yeah

people that clean their pools and everything else

especially especially over summer

like people who leave it last minute

just charge them a surcharge

like the ones that wanna do it over winter

you give them the standard rate

especially if it's yeah

a pump upgrade or anything like that

so I I sort of just coached him through that and yeah

he grew it from 80 grand to quarter million dollars

in that two year period

paid the loans off and everything

so that that's one way that you can get started

if you're working under someone

that you can actually acquire their business

another one that had that started from scratch

just started as a sole trader doing some contract work

and eventually got some their own contracts

then we put them into a company

structure and once I hit about $100,000 revenue

but when

when you're on your own and you're just doing that you

you got a job it's not a real business

where it became a real business was then

when we started having other employees

at first we had a few contractors here and there

and he used a labour hire firm

so he didn't have to hire directly

and then once he got busy enough

he hired directly for himself and now he's got uh

four uh basically four trade

I think I can't remember if it's too

I can't remember what the exact mix is

between apprentices and um

fully qualified but um

so he's in electrical and what they did

so as I was running through just

you know just normal electrical maintenance

upgrades that sort of stuff

they actually bought a AV company and bolted it on

cause they

they had a whole lot of people asking to do cameras and

and all that sort of stuff

and then he saw a security company that was

though for sale

and he bought that because it had staff

and it had all the contracts and everything

and um

they were doing a few new builds as well putting um

just security systems in um

just different greenfield estates

so that's where you can sort of go vertical

and then horizontal

where it's adjunctive to your business as well

so that's a it's a really good way to grow um

so first go vertical

as in everything that's in your industry

um or like your sort of yeah

if you're electrician

everything that's got to do with electrical

and then you can go a little bit horizontal

as in when I'm doing my electrical work

sometimes I might install a security camera

or whatever it is an intercom

all that sort of stuff so then if an opportunity comes

and you got good cash flow and everything else

and you can fund it

and purchasing another adjunk business

and then rolling it up together

that's another way to grow and scale really quickly

outside of that um

there's nothing wrong with just

you know putting in the work

getting the marketing right

because no trades and construction so

so there's so little advertising

like so many businesses just don't advertise

and it's so easy these days

like you can literally go to chat GPT

get an image ad written up

which is super simple

put it into Facebook and you'll get leads straight away

like it's not hard and it's cost

like it's very cost effective

but your competitors aren't doing it

like so many trades in that

they just rely on word of mouth

and like yeah

if you're good at what you do

you'll get new clients word of mouth

but it's not a sustainable business

well I appreciate that actually

you know what that you just said way to to um

uh AI or

uh technology now

so actually there

there's still a lot of tradies like you just said

hasn't used

or haven't been dabbling themselves with technology

like AI

and apparently one of one of the key things that I

I want to mention as well

is that if anyone actually heard about Cody uh

Cody Sanchez uh one of the best businesses out there

because there's AI

there's whole this heaps technology out there still

the boring businesses

still that's actually gonna make millions

it's not really those I mean yes

there's AI but depending on what niche and

and Technically Australians predominantly

we have a lot of demand of I mean just recent

recent recording that we've done with

from the Masters Electricians Association

which is uh Katie OK dot Raven

one of the things that she also mentioned is that

there's still a lot of demand

backlog of houses for tradies

so apart from that

apart from this is it's not just electricians

but obviously

you cannot just build a house with an electrician

obviously

there's whole heaps of trades involved in here

it's not should not be I mean sorry

I'm not preaching it out in here

but in such a way that technically all the signs

telltale signs

that tradies would not be taken over by AI

by robotics in 5 years or probably in our lifetime

right

and and but if they augment what they're doing right

like you just said

would actually really create a lot of difference on

on their businesses so circling back right

circling back to what you've seen

what you've mentioned I appreciate

what else can actually tradies maximize

utilizing any technologies

probably that you already been using out for

for your clients

that probably everyone else is just missing out yeah

so definitely use digital accounting software

cause I think gone are the days where you just yeah

like I didn't hear about any

I know a lot of tradies

like to do cashies and things on the back of a receipt

but it'll it'll come and catch you up

like the government's all over that sort of stuff

these days it's so easy just to have a mobile app like

and it's it's on iPhone now as well

so you can do it on Android and iPhone

cause originally they released on Android

but like with the zero app

you can do up an invoice and you can get your like

especially if you're doing residential maintenance

and that yeah

they just tap the back of your phone

like you don't need anything

like you always got your phone on

you do up an invoice and get payment there

the benefit of that as well

is that it helps your cash flow

cause if you can get payment on site

and you're not chasing people up

you're saving time

you're getting payment there or you can even just say

hey to do that

it's gonna cost this much

tap here and then I'll do the work even better

you get paid paid up front um

but it it just saves a lot of time

as you get a little bit bigger

that's when you wanna look at other tools

one of them that I use with

one of my clients is called Service Mate

it's just the word service and M8

that's really good project management software

especially if you got multiple teams

that you're sending out to different jobs and

and everything else and it's quite robust

and you can get quite in the weeds with it

but at the same time you can also use it very lightly

it just helps you manage everything

if you don't know where this job is

where that person's at

and you're trying to run it all on the

back of a piece of paper or like a paper diary

you're gonna miss things and yeah

there's gonna be cost blowouts and everything else

if you have proper like a technical

um software or cloud software

and then you can also track everything

and like everyone's got a smartphone

so it has a smartphone app

all your staff can use it super simple

everyone uses it together

and then you just streamline that process

you don't miss out on anything

and then you can iterate a lot faster with

you know doing your invoicing

doing your quoting and everything else

so they're just digital tools

just to help speed up those processes

cause I agree with you

like AI is not gonna replace people like I

I don't think maybe in some factories

there might be more robotics and everything

but when it comes to building a house

especially with the amount of compliance

and everything that we have in Australia

people aren't going anywhere anytime soon like there

there's

I'd say it's a very long time until we replace trades

yeah with robotics and even then

like you're gonna have to have people supervising and

and doing everything else

cause even if you look at all the mine sites

like yeah OK

they might instead of having one driver per dump truck

in the mines in like

WA and and Queensland

you have one person in operations room

that will operate two or three

so even so like

even once you do get to that level

it's

the labour force doesn't even get cut down that much

and that's a very simple operation

just driving a truck up and down in a straight line

like

you still have one person looking after 2 to 3 trucks

so I think

utilize AI

as much as possible for the business operations

so that way

you can get the most out of your labor force um

and then you're not tied up in too much paperwork

cause the biggest issue now is

before the compliance and everything else

there is a lot of paperwork that

you can get caught up in um

so if you can template that out

automate as much as possible uh

that that's also another area where you um yeah

especially'cause it

just buying back your time'cause your time is finite

so if you can have some sort of system

process in place

where you can get all that paperwork out

and you're not yeah

working from 6:00am to 3 or 4

and then from 4 to eight PM doing paperwork

if you can cut that time down yeah

then you can use that time to grow your business

and work on your business

or spend time with your family

now what are the

what are your thoughts of utilizing remote resources

have you been using one

so I do like promote resources in terms of

to cut time down personally

we are Canning's done unsure

but when we do use remote resources like video editors

um and a little bit of the

a little bit of help with marketing

although I've moved that to now AI

which has been great

cause I can sort of control it all myself

so I have been using AI a little bit more

which is replace a bit of that

external marketing function

but I

I think the right things you do want to outsource

especially if it's very like process based work yeah

the the in person stuff

you can't really outsource

like you're not gonna be able to outsource

someone to lay a couple of bricks

or something like that that might be a bit harder

but but from an administrative point of view

I think it's a good stepping stone

but then a lot of the admin

stuff that's getting outsourced

now is actually starting to get replaced by AI

as well so I think

I think both of them have to work in conjunction

but one of the crazy things is um

cause a lot of people use a virtual receptionist

so they might use someone like a team

in the Philippines

I can answer the phones 24 hours a day

and provide that support to do all the things

I was looking at a demo of an AI receptionist

which will do everything

that a reception function does

and then if it's too complicated

it sends it to your actual team

so I I I was actually looking into it

cause I was thinking

maybe doing it even for my business eventually

cause if someone wants to come in

and they wanna book a call

the AI can check my diary go hi

yes so you wanna come on as a client

alright there's a 15 minutes slot at this time

does that work for you yes

alright provide me your details

takes all the details down

and then books the appointment

and like does everything like fully automated

I don't need a human to do that

so I

I do think that a lot of things that are outsourced

unless they're a little bit more

specific and specialized

some of those will be replaced by AI

but I think it's really good

just from a cost perspective

just cause labor costs are so high in Australia

especially

like admin or all your sort of back office work

even get that outsourced

like there's a huge huge gain in profitability there

imagine actually just getting your life back

at least a quarter of a day

or let's say yeah

a quarter of a day that you get it

and then here you are

you're actually running your business

more efficiently and better

because you're not

you're not actually already entering

or sending invoices

you're not the one who actually chasing

or following up emails here and there'cause

some of them can be automated or yeah

and and

with the likelihood of also

passing on a little bit more technical stuff

because of assistance of AI

because now when you're your team member

let's say you have a remote team member

and unsure of what to do

you can actually replicate yourself

that if that person would require some assistance

it can think like you and give you some

give that person some guidance

as long as you've trained that AI well

I mean obviously there's what we call like oh

it's

I don't know if I can capture everything in my head yet

put it without thinking

but there's some parameters that you can say that well

come on you you cannot just always just rely on that

but at least on some some checks

the AI can actually assist you

and it's like the Lawrence AI

that can give you guidance on what you knew

what you need to do next yeah

yeah it's sort of like dumping your brain into the AI

and then it can also pull out yeah

other things that it's learnt and trained on as well

to help with that decision making

and whatever else that you need

and I think it's also good for assistance processes

and like standard operating procedures

cause there's so many tools out there where you can

yeah have the AI produce something as a starting point

and then have all those things put in

especially if you need different policies

uh written up

uh one of the things I even do that

I find that's really good with AI

there's some AI tools where uh

I can screen record and it'll actually make a whole um

standard operating procedure how to do something

I can give it to my employees

or I can even just talk into the AI

and then it's sort of like

I just say I need a policy done in this

and I'll just keep talking to him like

this is my policy

this is how I wanted it to work and everything else

and then they'll they'll structure it all

and fix up all the grammar and everything else

from me

just riffing on the phone to it for like 20 minutes

so it makes a policy document for me okay

now let's delve back a little bit to you

what is what is the one piece of advice that you got

that got you where you are

shall we say it's definitely a tough one

cause I've had a lot of good pieces of advice

but I'd say the main thing for me

which I've been quite fortunate so um

both my parents have been business owners

so from a young age as much as like

I know a lot of people will say like

oh you know

I want to spend all this time with my family and

and whatever else um

I was actually raised mainly by my grandmother uh

cause my parents worked a lot

but it was actually just seeing their example

cause I think kids take after like

what they see you do rather than what you say to them

and cause I saw my parents always working very hard

it instilled a very strong work ethic in myself

which I'm quite grateful for

so I think by just having learnt from

actually their example of just yeah

the thing is just always taught me like

if you work hard enough for something

just keep your head to it and just keep chipping away

that you'll eventually find greatness in that

and I saw that

my parents'cause they came from extreme poverty

from my grandparents and made something by just yeah

head down work hard

and not listen to all the

all the noise

and everything about how you can't get ahead

how it's impossible to do this

so I think sometimes

you just have to put the blinders on to those victims

and those excuses and then just

just go for it love that love that well

that's a typical thing of companies who actually just

let's say started

and if more likely even if the um

business owner is very entrepreneurial

there's so many shiny objects out there

that can really distract you

and I think that that advice is really the main thing

I mean I mean it's like underrated

hmm so when you when you head down really focus on that

it'll get you somewhere right now

in terms of

what advice can you give out there for them to

let's say those are struggling

let's say in terms in profitability

what could be the telltale signs

that they should be putting their hand up

to reach out to you and when is it right

so or what what can they do as well

yeah so there's sort of two elements to it one

it might be just a cash flow issue

which is very easy to fix um

the other is if you actually got profitable

like issues with profit and very soon

cause with profit

it's just income minus expenses equals profit

so there's only really two levers that you can look at

which is either you increase your prices

or you become more efficient

and you cut your expenses down

with some people it is cutting the expenses down

they've got yeah sort of what you're saying before

with shiny object syndrome

they go oh

I wanna have that subscription and that subscription

and that sounds good

I wanna buy that and I wanna buy this for my business

and I want the high end Hilux or whatever it is

cause it's FPT exempt and you know

I can use it to go camping

and whatever else on the weekend

and show off to my tradie mates and whatever else

but at the end of the day

it's like OK yeah

cool it's an FBT exemption but you know

do you really need it in your business

is this the right decision for you

cause as much as it might be a tax deduction

if you're a small business

your tax rates 25%

so why would you spend ￠75 to save 25 cents

like sometimes people get too blinds blinded by

I wanna pay the least amount of tax possible

it's like hey

do you know who else pays no tax

homeless people people on Centrelink

they pay no tax so if you wanna join them

like go ahead I

I just see tax as a success fee

so sometimes people get too blinded on just

I wanna save the money I wanna pay no tax

so I'm gonna spend as much money as possible

it's just like well

it's not gonna help your business

and it's not gonna help you reinvest in your business

and grow and move forward

so that's on the expense side then yeah

with the pricing is is very important

if you can't get your pricing right

you're never going to turn a profit cause yeah

if you way too high

your competitors are gonna come at you

and if you price right underneath

you might get all the work and then yeah

you're not gonna be able to create a profit on it

so you just need to find that

that sweet spot or what I've been finding as well with

um one of my clients um

he just focuses on doing caulking

but he's known as like the best corker like

so he only does the highest end homes

he's based in Melbourne

so do a like your two rack homes

so they're very expensive suburbs

him and one other person

and he probably makes more money than

some of my other clients that have got like 10 staff

like just cause he's very specialized

and he has a name there

and he just does a very top end and yeah

the very high end luxury homes and all that that they

they seek him out just cause he's very

very good at what he does

and he's just focused on just one thing

and the reason why he's got one staff member

cause the other staff members just very

very high quality like himself

you know he's a little bit pitch and hold

in the sense that

it's hard to find other people to go to that quality

yeah but that's where you have to look at your pricing

what's your competition doing

where are you positioning yourself in the market

can you specialize in some area where people will pay

more money and see you as a specialist

rather than a generalist so there's

there's all these different elements around pricing um

but ultimately get your pricing right

make sure your expenses are right and then yeah

you'll be profitable at the end well

so to some of up some that up a little bit

it's like

you don't know what you don't know pretty much

now to close off this conversation um

I get appreciate your time and it's

is there any message you wanna put out there

and how can they reach Lawrence

yeah

so my message is just start looking at your numbers

like I know some people's a back thing whatever

but if you know your numbers

like the numbers don't lie

your feelings will make you know

if you go from your heart

it'll burn you if you go from your head

you'll overthink if you I only go from like my gut

like what is my gut feel

but I also like to see the actual numbers

rather than doing things on emotion

um cause yeah

just the data is there you can't

you can't fudge the numbers

but if you have a good accountant that looks after it

your numbers won't be fudged and yeah

if you wanna reach out to me

just I'm across all socials just under my full name

which is Lawrence Petruzzelli

it's a little bit hard to sell

so I'm sure that you'll have it in

in the show notes or yeah

I'm sure it'll be in the thing but yeah

if you just Google my name or go to Lawrence

petruzzelli.com

you can get in touch with me my business is m

d B C O dot com dot au

so if you wanna look at my uh accounting firm as well

that's there if not

just Google my name

and you'll see all my different social media profiles

and all my content

so feel free to look through all that

and you'll learn a few things as well

really lovely work man so

very fortunate for you to shed

a little bit of your time

so we can I mean

let a lot of traders out there struggling out there

just just stay on your job that that work

that business you have won't go anywhere

you still gonna be very very important and here we are

we are here out for you so again

thank you so much for coming by

and look forward to seeing you

um yeah

previous last guest was actually from Queensland

so when I go there definitely gonna catch up with you

too so yeah

we'll definitely catch up

and thanks for having me on the show

wonderful thank you so much again

Lawrence from the Profitable Estimator podcast bye