September 8, 2026 – Smarter Finance Robert Misheloff and Capital Care Group Steven Phillips

00:04 INTRO 1: In the AM, radio network, broadcasting from AM and FM stations around the country. Welcome to the Small Business Administration Award-winning School for Startups Radio, while we talk all things small business and entrepreneurship. Now, here is your host, the guy that believes anyone can be a successful entrepreneur, because entrepreneurship is not about creativity, risk or passion, Jim Beach.

00:22 JIM BEACH: Hello, everyone, welcome to another exciting edition of School for Startups Radio. I hope you’re having a great day out there, riding the roller coaster, because I have a great show for you. First up, Robert Misheloff is with us. He is in the equipment rental business. I am fascinated because I know nothing about it.

00:44 JIM BEACH: That is one of the reasons I love this show as I get to learn all of these cool businesses and get to see all of the cool people doing it and get insights into what other people are doing, and it’s just a fascinating, fascinating story. This show is thousands of mosaics, thousands of little tiles that create a picture of what entrepreneurship is.

01:07 JIM BEACH: We try to bring great guests on a variety, almost any topic that could in any way create another tile of learning in our big picture. So I’m excited to welcome Robert. After that, we have Stephen Phillips. He is a CPA, and we are going to talk about buying and selling houses and some other issues as well. He is very good as well. So I’m excited to introduce Stephen to you as well.

01:35 JIM BEACH: But first, before we get into that, for several days, maybe a couple of weeks, I’ve been promising a deep dive into sort of my macro thoughts, 30,000 foot level thoughts on where AI is. I get more questions about this from, uh, listeners, people writing in and asking what I think. Please continue to do that. We always try to answer. I’m going to answer the AI question today. Hopefully in a cohesive manner. I only have 4 minutes.

02:07 JIM BEACH: So here I’m going to go for it. Number one, the people running the AI industry are not good people. Flat out. End of story. If you look at some of them, there’s one or 2 good ones, but if you look at the major companies, the people in charge have serious moral deficiencies. And I’m sorry, but that really relates to this story. If you know, if it was just hardware, who would care, right?

02:34 JIM BEACH: But they are creating the future of our world and they are just not good people. And if you want to challenge that, just go look at some of the interviews, look at what the wives of some of them are doing. These are people who you would not want babysitting your children and they are creating your future and your children’s future. Number two. if you go on YouTube right now, there is a new book out that says, if you build it, everyone will die.

03:07 JIM BEACH: That’s the title of the book. It is by one of the preeminent AI thinkers of all time. You cannot find an AI specialist, a true thought leader in the space who is predicting good things. Go on YouTube and try to find one. AI is going to be good for us at the macro video. Every single person who is involved in AI that’s not getting paid right now is predicting. We all die.

03:34 JIM BEACH: And it’s just really hard to say that, but that’s just the videos I’m finding and the education that I am seeing. And these are the smartest people in AI out there, the godfather of AI, 100% endorsed the book that everyone’s going to die. All of the other thought leaders are agreeing with it. You really can’t find anyone who say this ends out well.

03:59 JIM BEACH: Sure, we get all sorts of the other side benefits, the great research that’s happening in medicine, but still, they don’t predict a good ending. And here’s the problem. They don’t have any idea what that ending will be because as they say, the person planning our demise is a thousand times smarter than us. And so how in the world could we conceive of how they will figure out whatever they want, when they decide that we’re not useful for them anymore.

04:31 JIM BEACH: Number three, and this is a really weird part, they’re running out of money. They have burned through about $100 million each, the top guys, I think, and I’m making that number up, but I did see that OpenAI just raised money at an $845 billion valuation. And that means to raise money. The next time it’ll have to go higher, right at a trillion, except no one is making money. These all of these companies are dramatically losing money.

05:00 JIM BEACH: And so it’s going to be hard to justify that trillion-dollar valuation, which means that only one of them gets to go public. Anthropic and OpenAI are in a competition to see who can go public first. The winner of that probably becomes the winner of the AI race because they get access to more capital. The other company is underfunded, and then only bad things happen. Um, number four, they’re overbuilding. We’re building too many AI data centers.

05:30 JIM BEACH: You keep hearing about all the data centers and all that. That’s where the money is going. Everyone who looks at it says we’re overbuilding, people are building like dot com, like tulip levels. If you don’t know the tulip story, ask me, and I’ll tell you that another day, in 1723 or something like that, a prince traded a tulip for a castle because of the tulip craze. The dotcom bubble, all of the same thing. And we are doing that right now with data centers.

06:02 JIM BEACH: So expect a big fallout there. And here is the worst part. Number five, everyone says that we need guardrails and no one has any clue what they are, who’s going to implement them. The local level governments are fighting against the data centers, but no one’s fighting anthropic or OpenAI at the macro level and say, you guys can’t do this. You need to slow down. You need serious guardrails. Every single expert out there says that we need to just stop right now.

06:34 JIM BEACH: But of course, we’re in a competition with the Chinese. If we stop, we lose. All right, there’s some of it. Thanks for listening. Got it off my chest. All right, great show coming up. We’ll be back in just a 2nd to do that.

06:51 INTRO 2: Well, that’s a that’s a wonderful question, actually. Oh, my gosh, I love the opportunity to do this. Thank you, Jim. Wow, that’s a great one. You know, that is a phenomenal question. That’s a great question, and I don’t have a great answer. That’s a great question. Oh, that is such a loaded question. And that’s actually a really good question. School for Startups Radio.

07:16 JIM BEACH: We are back and again. Thank you so very much for being with us. You know, as our businesses grow and get larger, we’re going to need more equipment. We hope so. That’s the whole point of growing. And equipment can be difficult to get used, new, rent, all of these options. I’m excited that we have someone who will help us understand the marketplace better. Please welcome Robert Misheloff to the show. He is the president of Smarter Finance USA.

07:46 JIM BEACH: He started this company and had a very successful run prior to this. He was a owner of a marketing company, and he saw from that experience in marketing that there had to be a better way to do financing products. We will ask about the link. Robert, welcome to the show. How you doing?

08:08 ROBERT MISHELOFF: Good. Thanks for having me, Jim.

08:08 JIM BEACH: It’s our pleasure. So tell me about the marketing business and why it wasn’t satisfying you.

08:15 ROBERT MISHELOFF: Well, it was satisfying me. Unfortunately, it wasn’t working anymore. I started, uh, with a friend, a direct mail company in 2003 and around 2013, direct mail just wasn’t as successful as it used to be with the advent of smartphones. Um, people just stopped responding to direct mail. And we were marketing a very specific product, which was reverse mortgages, which is a product where older folks can stop paying their mortgage, but still live in their home.

08:45 ROBERT MISHELOFF: And uh, yeah, we we went from being a $50,000 company to a $500,000 company and I’m talking about revenues uh, overnight. So I had to find, Something else to do. And, Interestingly, someone who had left our company, uh, was playing basketball, uh, was someone who still worked for us and had gone to work for an equipment finance company, and Turned out they were getting their leads. They’re the customers from direct mail.

09:13 ROBERT MISHELOFF: So I started selling direct mail to folks that today are my competitors, but to equipment finance companies and other small business lenders. And through that process, I found that a lot of them, in fact, the majority of the folks I was talking to weren’t being honest with their customers, they were lying to them about the rates and the terms they might expect when they do equipment financing.

09:39 JIM BEACH: Okay. That’s not surprising, is it? I mean, a lot of credit cards, a lot of people lie about the terms.

09:46 ROBERT MISHELOFF: Well, um, yes and no. For example, in in in mortgage, uh, there’s a truth in lending statement. And so if you, you lie to your customers in a regulated industry, like insurance or, or, uh, other financial products, you can actually go to jail, but there’s very few protections for business lending primarily because it’s considered a business product and not a consumer product.

10:11 ROBERT MISHELOFF: So it doesn’t have the same guardrails, uh, because it’s assumed as a business owner, you’re going to be more sophisticated, you should do things like have a lawyer look at every contract you read. And The truth is, most small businesses don’t have attorneys, can’t afford attorneys. The vast majority of folks, uh, for instance, my company works with, um, 10 employees or less and a significant amount are either one employee or just the owner or a couple of employees.

10:42 ROBERT MISHELOFF: So the resources just aren’t there to have a lawyer look at everything you sign.

10:47 JIM BEACH: No, that would be very expensive and slow us down and I think the expense is the main thing. So.

10:55 ROBERT MISHELOFF: Oh yeah, absolutely.

10:56 JIM BEACH: What kind of lies are they talking about? Let me back up. Is most of this restaurant type equipment?

11:03 ROBERT MISHELOFF: Um, some of it is, uh, the vast majority of of what we see is trucking and construction, uh, type equipment. Um, whether it’s yellow iron or a, you know, a dump truck or a semi truck. Um, And I’ll give you an example of some of the lies people are, like, 1st of all, is just about what, what the rate is.

11:26 ROBERT MISHELOFF: And, um, folks, and the thing I was told specifically, by one of the folks I was working with back in the advertising days was, he said, look, guys that pour driveways or drive trucks, they’re really good at what they do, but they’re not very good at finance. So you can just tell them anything. Um, But one of the things we see today and is very common is we call it the fake approval scam. And what will happen?

11:56 ROBERT MISHELOFF: Company will send out what looks like an approval. They’ll say you’re pay this, whether it’s a, you know, a $1000 whatever. And What you need to pay is your 1st and last payment plus some documentation fees, which incidentally is very common. Most transactions require that sort of an upfront payment, if not a down payment. And. So company will collect that 1st and the last payment and get a signature from the borrower.

12:24 ROBERT MISHELOFF: Once they receive funds, they then call the borrower and say, well, we weren’t able to. Secure the terms that we quoted you. However, we’ve we’ve secured these different terms. And, you know, will be a substantially higher payment than the person was quoted. They’ll say, by the way, you’ll see on page 2 in 4.5 that if you don’t move forward, We are going to keep this money as earned. And, you know, typically that money ends up being a couple of thousand, two, $3,000.

12:57 ROBERT MISHELOFF: Just small enough that it doesn’t make any sense to try to fight it. There’s no regulatory agency to go to. There’s no, uh, you can’t get a lawyer. Um, I mean, you could, but it would cost more in lawyer fees to prosecute than you would win.

13:15 JIM BEACH: Yeah, absolutely.

13:15 ROBERT MISHELOFF: And so, These companies, and what happens is, and this is not just some victimless crime, you’re not stealing $2,000 from IBM. You’re, you’re, you’re, you’re, these, these companies are taking money from very thinly capitalized businesses, oftentimes startups, where, By them stealing this cash. That startup now doesn’t have the money they were planning to use for a down payment to start their business because in a lot of these very small businesses, the equipment literally is the whole business.

13:46 ROBERT MISHELOFF: So it’s, you know, it’s pretty gnarly.

13:48 JIM BEACH: Yes. All right, so you saw this problem. And you’ve had a friend playing basketball. What happened next? Walk us through a little history.

13:57 ROBERT MISHELOFF: So at this point, I said, you know, I can’t do this. I’m not going to help a bunch of thugs rip off small business owners. I’m a small business owner myself. I wouldn’t want this to happen to me. So I start Smarter Finance USA, uh, and put up our website and basically in the beginning, the website was just talking about all these scams I got told about and how to avoid them. And then yeah, the calls started coming in.

14:28 ROBERT MISHELOFF: Uh, and it was interesting because I was getting these calls on. I didn’t actually, I’d never actually done a deal. So I had to learn very quickly how to put these transactions together.

14:40 ROBERT MISHELOFF: Uh, but that was, you know, 12 years ago, and in the process, ended up building a business, and today we’ve got, uh, you know, uh, 15 employees, and uh, we’ve now helped uh, 5000 or so people. Finance their equipment and we tell people is we say, look, you may not like what we have to say all the time, right? Sometimes, especially when it comes to small business lending.

15:08 ROBERT MISHELOFF: The reason why, uh, there’s this dishonesty sometimes, is that the rates when, uh, especially a startup business or if you’re a business with, with challenged credit, you’re not going to get the same rates financing a used dump truck that you’re going to get financing a brand new Honda, which is, you know, a lot of times what what people expect. And so you have to tell people the ugly truth.

15:34 ROBERT MISHELOFF: And you have to let people make an informed decision how they’re going to finance their business, not lie to them.

15:41 JIM BEACH: All right, Yep. Okay, so keep going. You put together, you were starting to get calls. Did that turn into deals pretty quickly?

15:49 ROBERT MISHELOFF: You know, it didn’t right away. Um, primarily because I I was incompetent when I started. And I think everybody you always have to start somewhere. And so I was, I was making mistakes. Um, so it was it was a trial by fire. And it was interesting because it was just me working out of my house and at the time, like 200 people a month were calling me. I couldn’t keep up without. Uh, with all the phone calls.

16:20 ROBERT MISHELOFF: But, Oh, after a couple of years, I had figured out, you know, a process, and the most important thing is getting your, your process down, the business, because there were so many things, there was so many different things that can, can make a deal challenging or, or sink a deal or kill a deal.

16:41 ROBERT MISHELOFF: Um, But, uh, after a couple of years, I had, uh, I was able to, to attract somebody with a lot of experience, to, to come in and, and help me run the business, so I could focus on marketing, and the proper systems could be set up, and today, you know, we’re long past that. We’ve, we’ve got a seasoned operations team and um, Salespeople who know what they’re doing and, and, and so forth. So um, It’s a lot different than it was 12 years ago.

17:14 JIM BEACH: Right. And does your business go up and down with the economy, if construction slows down, do you slow down?

17:21 ROBERT MISHELOFF: Oh, absolutely. It’s not uncommon for us to, uh, have $100,000 swings in revenue, uh, month over month. Um, you know, we’ll do, you know, $400,000 one month and $250,000 the next month and so forth. So that’s another thing that, that’s very challenging in a, in a transactional business like this that focuses on a lot of economically sensitive, uh, markets is, you got to really worry about your cash flow.

17:50 JIM BEACH: Yeah, definitely. I mean, how you should have a base. Idea of what your expenses are, say $100,000 a month, and that’s not going to go up or down depending on how many deals you have, right?

18:04 ROBERT MISHELOFF: Right. Right. There’s there’s a certain break even point that we have to do in revenue to pay our our fixed expenses, you know, our rent, our, our, um, our non-commissioned employees, um, our insurance and so on and so forth. Um, And as long as we clear that number, we’re doing pretty good.

18:24 JIM BEACH: Right, so your cash flow shouldn’t be an issue. Well, it could be if you get down that low. Do you ever have times where the business is that slow that you’re actually worried about your cash flow? Is it that seasonal and that depended on the economy?

18:41 ROBERT MISHELOFF: You know, yes and no. We we have to make sure we keep adequate reserves.

18:48 JIM BEACH: Otherwise, we could get in trouble with some of your loans and stuff.

18:53 ROBERT MISHELOFF: Uh, well, uh, paying people, right? We have to make, you know, and what’ll happen, I’ll give you an example. If we were to go into a recession, um, the, the, the appetite in the credit markets can change, and all of a sudden lender stop buying deals, and we still have a cost to customer acquisition, right? We’ve got a website. Um, we’ve got to pay people to talk to people. Uh and so on and so forth. And so if there was a protracted recession.

19:25 ROBERT MISHELOFF: And we didn’t pivot properly. Yes, it could absolutely put us in a bind because we do still have costs. We have to do a certain amount of sales just to keep the doors open. And so you just have to maintain an adequate cushion, um, to let you pivot when you need to pivot. And for example, Um, we do a lot in the long haul trucking market, you know, the big, you know, 18 wheelers. Yeah, and when that market is hot, it’s very, very lucrative.

19:58 ROBERT MISHELOFF: At times, that market gets more challenging. And so what happens is you’re not able to get as many deals through. There’s just nothing you can do about that. So that, the key in, in our business really is making sure. Um, you’re adequately diversified, uh, meaning you’re dealing with folks that also sell medical equipment. And also saw restaurant equipment and so on and so forth. And the way we talk about it to our salespeople is, well, you wouldn’t put all your money into one stock.

20:31 ROBERT MISHELOFF: And this is kind of the same thing. If you’re gonna go work with folks. That that sell equipment. You got to make sure it’s not all the same type of equipment. Otherwise, your income could be at risk.

20:45 JIM BEACH: Yeah, definitely. So how do you go and acquire new customers? Does the website do it all for you? Do you have to go out and market things like that? Is it word of mouth?

20:58 ROBERT MISHELOFF: Um, so most of our business, believe it or not, does not come from the website, we do get a steady stream of traffic and leads from the website. But most of our business is referral based, and it comes from somebody shopping for equipment, whether it’s at a large dealer. And in the case of a large dealer, you know, a lot of times the large dealer will have in-house financing.

21:25 ROBERT MISHELOFF: But if somebody doesn’t qualify for that in-house financing, they still want to sell that person a vehicle or a piece of equipment. And they’ll say, you know, you can call these guys at Smarter Finance USA and, and they’ll help you out. Or in the case of a smaller lot, you know, we deal with a lot of smaller businesses that might have 10 trucks on their lot or something like that. And uh, they won’t have in-house financing at all.

21:56 ROBERT MISHELOFF: So if they want to sell equipment. They absolutely have to work with folks like us that can help them uh, finance it for their customers. And we, we acquire those, um, primarily through relationships, or salespeople go to trade shows and meet them, or they get on the phone, and they do good old-fashioned cold calling where they reach out through LinkedIn.

22:19 JIM BEACH: Oh, the good old LinkedIn reach out.

22:22 ROBERT MISHELOFF: Yeah.

22:22 JIM BEACH: And are you growing, you know, significantly every year? Is that your goal? Are you happy where you are?

22:29 ROBERT MISHELOFF: So, you know, we’re kind of at the mercy of the economy. And so our goal is always to grow. Um, We don’t always do that. The last couple of years, we’ve actually shrunk. Um, and the reason for that, uh, in 2022. Uh, it was a, uh, just a different time.

22:49 ROBERT MISHELOFF: Uh, people were just getting out of of COVID and acquiring equipment and equipment was overpriced, and for instance, truckers were getting twice per mile, what they usually got and twice per mile, what they’re getting now, uh, usually when we talk to somebody who drives a truck for a living. What they get paid is about, uh, $2 to $2.50 per mile in back in ’22 and in the beginning of ’23, they’re getting paid closer to to $4 a mile.

23:19 ROBERT MISHELOFF: So their, their profits were through the roof and folks were getting all the equipment, they could get there, their hands on. And of course, everything came back down to earth. Shipping rates went back down to normal. Um, And everything else. And so, uh, for that reason, you know, our revenues fell and our less capable salespeople were no longer making the same amount of money as they were making, et cetera.

23:46 JIM BEACH: Right. Do you have salespeople competing against each other?

23:49 ROBERT MISHELOFF: Um, well, they’re not competing for the same accounts, you know, like, you know, uh, like every place, once the salesperson has an account, that’s their account. Yeah, and you know, there are so many businesses in the US, we don’t have to really worry about them running over each other. Um, But, I mean, like any sales team, it’s competitive.

24:12 JIM BEACH: Right. Well, sure, that’s the way it should be. If you’re not competing in sales, you’re missing out.

24:19 ROBERT MISHELOFF: Yeah, totally. Competition.

24:20 JIM BEACH: So. Right. That’s just the way it is. Um, what’s your goal then for 5 years with this? Are you going to stay in it or do you build it and sell it to someone larger? You know?

24:34 ROBERT MISHELOFF: You know, I’m not planning on that, but you still have to plan for that. I’ll tell you what I mean by that. You know, I’m in my 50s.

24:45 ROBERT MISHELOFF: You know, at some point, you have to retire either because, um, you get burnt out, or you get too old, or you get too sick, and what, from what I’ve seen, a lot of people, they don’t retire because they want to, they just can’t do it anymore for whatever reason, and it might be a health issue, um, you might die.

25:08 JIM BEACH: Um, there’s health issue.

25:10 ROBERT MISHELOFF: Yeah, that is a health issue. Uh, but no, the, the, the, the goal is to to continue growing it, I don’t see myself. Selling the company and and watching Fox News all day in front of the TV and and learning to play golf. That’s just not on the agenda. Um, But you have to be able to, uh, you, you have to put the pieces in place so that you have the ability to do those things.

25:39 JIM BEACH: Definitely, definitely. And as you said in the beginning, I was really excited to hear that. It was all about systems for you at 1st and getting those systems up. And once you had those in place, it became a lot easier.

25:55 ROBERT MISHELOFF: Yeah, absolutely, you can’t do anything without a system.

25:58 JIM BEACH: Exactly. Yes. Robert, how do we find out more? Follow online, apply for a job, all that stuff, please.

26:06 ROBERT MISHELOFF: Easiest way is our website. SmarterFinanceUSA.com.

26:08 JIM BEACH: Fantastic. I’ve actually looked at the website. You have an interesting looking team, so all the people on your team look like they’re cool individuals with different stories and stuff.

26:19 ROBERT MISHELOFF: They are pretty cool.

26:21 JIM BEACH: Yeah, it looks like a good group of people. Robert, thank you so much for being with us. Congratulations on your success and we’d love to have you back as you continue to grow.

26:34 ROBERT MISHELOFF: Wonderful. Thanks for having me, Jim.

26:36 JIM BEACH: And we will be right back.

26:38 INTRO 2: That’s a great question. Well, I think it’s a great question. It’s great. Great question. Yeah, that’s a really good question. Okay, that’s a great question. Yeah, it’s a great question. Those are two great examples. Oh, great, Jim. Jim, I think that’s absolutely, absolutely perfect. That is exactly it. School for Startups Radio.

27:03 JIM BEACH: We are backing again. Thank you so very much for being with us. You know, us entrepreneurs need financial help. We need financial planning. We need tax planning, and we are different. And so we need people who understand our specific needs. Please welcome Stephen Phillips. He is one of those people. He is the managing partner of CCGCPA, that’s Capital Care Group. It is a southwest Florida firm based on helping individuals, families and business owners make their important decisions financially.

27:34 JIM BEACH: They try to have a proactive approach to tax preparation and all of the other issues, the cash flow management and succession planning and estate services and all of that kind of stuff. He can also help with outsourced CFO support if that is needed. Stephen Phillips, welcome to the show. How you doing today?

27:54 STEPHEN PHILLIPS: Spectacular. Thank you for having me.

27:57 JIM BEACH: How are us entrepreneurs different? Than the other people out there. The doctors, the lawyers, the…

28:02 STEPHEN PHILLIPS: I’ll give you a. Yeah, I’ll give you a perfect example. I just got off with an entrepreneur down in Florida Keys. She’s got a bagel business. She does wedding planning. Her husband’s a general contractor. Nobody’s telling her how to save money. How to pay her taxes, what she can deduct, how she can organize that. If you work for a Fortune 500 company, you show up.

28:27 STEPHEN PHILLIPS: They give you a form, you fill out how much you’re sending to the government and hopefully you get it right. They tell you how much you’re gonna invest in your retirement plan, that you’re gonna sign up for your health insurance, and come tax time, you’re gonna file a return, you’re done. Right? Little different for entrepreneurs. Nobody’s giving us advice. Nobody’s telling us what we can deduct. Nobody’s telling teaching us how to invest. We’re all hoping and figuring out as we go.

29:00 STEPHEN PHILLIPS: And what I found out is, with entrepreneurs, there’s no 2 businesses alike, right? Everybody’s a little different. Now, we can categorize them, generalize them, and everything else, and there’s some generic strategies we can use across industries, but every industry is a little different from tech that’s a little different to the plumber who’s figuring it out. All those business challenges add up. So I think. My perspective is, the beautiful thing is, the good news with a business owner, an entrepreneur, it’s a blank slate.

29:32 STEPHEN PHILLIPS: The bad news is it’s blank slate, right? We can paint a picture, however we want, what’s important to us. So, so much of what I do with all of my clients is working through that process to make sure, basic things are done, basic blocking and tackling, savings. Tax structure. Um. You know, just making sure simple things are done, 2 more complex things. Advanced retirement planning, advanced estate planning. I’m working with an 80 year old right now who’s making has a spectacular business.

30:04 STEPHEN PHILLIPS: He’s trying to figure out how to distribute his assets in a tax efficient way. Um, I work with people as they’re selling business.

30:13 JIM BEACH: Great.

30:13 STEPHEN PHILLIPS: I spent all my life building this business. Now somebody’s offered me a ton of money. What do I do then How do I structure it and that I constructively take advantage of the best ways in the IRS tax code? How do I make sure that money lasts for me the rest of my life and the life I want to live? For everybody that’s different and it’s a lot different than being an employee who makes a salary, the numbers are the numbers at that point.

30:45 STEPHEN PHILLIPS: Now it’s just, hey, you’ve got X when you retire, you’ll have X amount of coming in. Hope that’s enough. And I think that’s where entrepreneurs are substantially different than typical employees.

30:58 JIM BEACH: Are they good at being told what to do? Or do you have to?

31:03 STEPHEN PHILLIPS: The good ones are. I mean listen. It’s, um, I tell my best clients. Right? And I, if you want to, if you want me to teach you how the watch is made, you’re probably not my best client. I’m really good at what I do. You’re really good at what you do. I’ll never forget. I have a pulmonologist. And every once in a while we’ll start talking technical stuff. He was like, shut up.

31:32 STEPHEN PHILLIPS: If you want to know, unless you want me to teach you how the heart and lungs and all that works mechanically together. It is, and then of course, we peel it back. This is what you need to do and this is why. And then there’s always some banter back and forth and feedback of, hey, this works, this doesn’t work. This is why we want to do this, I want to do that. It’s not that he listens to me 100% of the time.

32:03 STEPHEN PHILLIPS: It’s just, we’re, I know his goals. I know what he’s trying to accomplish, and I know what he’s not good at, and I’m trying to complement that.

32:14 JIM BEACH: What is the macro looking like in your opinion right now, Stephen? They’ve been telling us we have a major recession coming for about 10 years now, literally. And with the election coming up, the uncertainty with oil and all of that. Where are you seeing the situation? And are your companies, the companies that you’re looking at the books, are their numbers down up flat? Where?

32:39 STEPHEN PHILLIPS: So, I’ll say, it’s an interesting. Great question, because it’s an interesting time. Listen, what’s the old Chinese proverbs to live in interesting times? That’s a pretty good thing, right? Because it’s definitely interesting times. Right?

32:52 JIM BEACH: Right.

32:53 STEPHEN PHILLIPS: We’ve got arguably higher inflation than we want, which is causing price pressures. I’m seeing stuff be soft. It’s not, listen, it’s, you know, I live in Southwest Florida, so we came out of COVID. We got hit by hurricanes, so depending upon what your industry was, there was a for construction, they were booming. Now we’re kind of coming out of those years and it’s like, we’re getting back to normality, whatever that is.

33:20 STEPHEN PHILLIPS: So now you’ve got to kind of stand your own and go back to the fundamentals. You know, servicing good clients, finding new business and so on. Do I see a major recession? No, but I don’t think, listen. I think the, I think the market, I, my invest, my clients, I’ve seen investment portfolio returns that are just aren’t sustainable. But I think do I think there’s something that’s going to pull the wool out of us? Do I think an ’08-’09 is going to happen?

33:53 STEPHEN PHILLIPS: No. Um, do I think we’re going to have some soft times and you’re going to have to work for your money? Absolutely. Um, but that’s, that’s, you know, I don’t know an entrepreneur who’s scared about that, right? In many ways, I saw as real estate kind of slowed down here in Southwest Florida, a lot of the realtors were really excited because they got back to the basic things. It wasn’t the craziness. Um, do I think, I mean, I don’t have a crystal ball.

34:27 STEPHEN PHILLIPS: Good Lord, I wish I did.

34:28 JIM BEACH: Oh, we all do.

34:29 STEPHEN PHILLIPS: I think. Yeah, listen, I joke. If I had a crystal ball. I’d be retired already myself, it would have made them tons of money and, you know, been doing something else. But I think. It’s different segments are doing well. Other segments are not good business owners are still doing good business and I think that’s true. You know, even in the ’08-’09. There was more money made in ’08-’09 because it forced people. I mean, I’m a perfect example.

35:00 STEPHEN PHILLIPS: I was working in a fortune 1000 company. I now built my business because what came out of an ’08-’09. Because I was primarily focusing home building down here in Southwest Florida. Well, I can, if you guys remember about what happened in ’08-’09, there was a major real estate recession for five years. So I see there’s always opportunity. Do I think we’re going to see a market correction? Listen. Some of the stuff I’ve seen in the market.

35:31 STEPHEN PHILLIPS: I don’t know if it’s sustainable, but, When and how, who knows?

35:34 JIM BEACH: What about the new condo laws in Florida that stem from the, what was it, Surfside collapse? Was that the name of the building that collapsed?

35:44 STEPHEN PHILLIPS: Yeah, it was. And it’s been tough down here. The condo market’s been tough. Um, it’s, you know, Not to get political. Obviously, they’re trying to do stuff to fix it, and it’s, it was, you know, everybody, there’s always an knee-jerk reaction, anytime there’s a horrible event like that. Well, we’re going to make sure everybody assesses and has unbelievable assessments, right, to make sure maintenance is always done. That’s always an ebb and flow. Um, you know, Florida was well known.

36:15 STEPHEN PHILLIPS: If you’re on a condo board. Why are you going to do major repairs if you’re into 75 years old. Why are you worried about past 10 years, you won’t be living there. So, I think some of the rules are important because it’s in, you know, we don’t want another Surfside, but it has done, done, put undue pressure on a lot of condo owners, and it’s cost the condo fees to go up.

36:43 STEPHEN PHILLIPS: So I, you know, I have a lot of older clients who are looking to leave condos because, between hurricane and because of the cost of insurance, which is primarily related to inflation beyond hurricanes, and the condo laws, it’s become cost prohibitive for some of them to stay in their homes.

37:02 JIM BEACH: So I hate to say this, but is there an opportunity in that for us on the other side?

37:08 STEPHEN PHILLIPS: Absolutely.

37:09 JIM BEACH: No, I mean time to buy?

37:12 STEPHEN PHILLIPS: It’s the age old thing. Don’t ever try to time the market. It’s just, if you buy the right place at the right time for you and it makes sense and you can hold it on long time, I think there’s an opportunity.

37:28 STEPHEN PHILLIPS: Um, I’m, like I said, I’m not privy to the day-to-day where the market is, but I have seen some movement and I’ve seen some softness, but, you know, then you counter argument. If if rates come down 2 points, then you’re going to see an increase in prices. So. I’m a big believer and I’m not, you know, I have real estate within my own portfolio and a lot of my clients have real estate. Do what you know well. And build your business.

37:59 STEPHEN PHILLIPS: In other words, If you’re going to be a real estate investor, you better be a real estate investor, you better know what you’re doing. It’s not something you dance in. I hear, I have tons of clients that are like, I want to be the next real estate guru. I want to have 15 properties. That’s great, but that’s a full time job. You can’t be a physician or somebody who’s doing it on the side.

38:28 STEPHEN PHILLIPS: You can, but you better get educated, you better get a real estate license, you better be the best, because the people I see making money in all those, um, areas. They’re really good at what they do. They may be a developer. They’re a real estate investor. They’re not somebody playing it in.

38:49 STEPHEN PHILLIPS: It’s just, I mean, if you’re an investor investing in the market, you, I mean, you can do it yourself, but study after study says you’re not going to perform as well as if you use an advisor to manage realistic expectations and get proper diversi- diversification. You can get lucky. You can buy Nvidia, you can buy something, you get lucky at the time, but that’s the exception, not the norm. That’s the equivalent of going to Vegas and hoping you won.

39:20 JIM BEACH: Tell us about building your practice, Steve, getting your 1st client and getting out there and building. How’d you do it? Tell us some stories from that time.

39:31 STEPHEN PHILLIPS: Listen, I did the old-fashioned way. I mean, I left corporate accounting in 2000. No, I did not. Well, I, listen, my, it’s funny you say that because my wife will argue the same thing. For father said she wanted needed an accountant and she started dating me. So, I mean, jokingly, no, the old-fashioned way is, listen, I started just talking to my friends and family and started getting referrals. I started in ’08-’09 when the economy fell apart.

40:00 STEPHEN PHILLIPS: There was, you know, corporate world left me as much as I left the corporate world. So in ’08-’09, I was starting my practice out of necessity, and it was hard. I did all the chamber events, all the heavy lifting to the point where I built my expertise and developed, um, a reputation and then slowly built a practice around and then got to a point where I started doing acquisitions and mergers and so on to grow to the next level.

40:31 STEPHEN PHILLIPS: Um, But there’s, I mean, anybody who believes you can just, I, I mean, I talk to other entrepreneurs all the time, people looking to buy, merge, so on. There’s no, it is a hard business. You know, building a CPA firm and a financial advising practice. It’s a hard business. There’s no get rich quick schemes in any business. I mean, even myself, as I’ve added extra business lines. I always joke. Oh, I’m a successful advisor. I talk to 6 business owners a day.

41:02 STEPHEN PHILLIPS: I should be able to cut the learning curve. I don’t want to say it’s impossible, but it usually takes 2 to 3 years to truly be to be in a robust manner. 1st year, you’re figuring out 2nd year, your, 1st year, you’re making your money, you’re paying your bills, 2nd year, kind of getting ahead in 3rd year, you start seeing the growth you want to see.

41:28 STEPHEN PHILLIPS: If there’s no, I can’t, every time, even, even my very talented people, some are able to do it a little quicker, but you’re not going to really cut too much time off that time horizon.

41:42 JIM BEACH: You mentioned. Buying and selling. Are you seeing some clients, getting offers are the markets as desperate for a new generation of owners, as desperate as they say they are? I mean, everyone I talk to says there’s just millions, literally millions of businesses that don’t know what the next chapter looks like.

42:01 STEPHEN PHILLIPS: I’d absolutely agree with you. 90% of my business owners, I spent a lot of time coaching and helping them figure out beyond the basic tax returns and investing and stuff like trying to figure out what their next step is. Um, depending upon the industry, I’ve seen a lot of capital. I, it, so I’ve been in business 15 years as a CPA. I’ve had, in the last 2 years, I’ve had half dozen clients sell.

42:30 STEPHEN PHILLIPS: Some sell for what they want, some get forced to sell and some don’t sell because the numbers aren’t where they want to be. You know, it goes through phases. And I think what I’ve seen over the last, it’s called 6 to 10 months, 12 months. Um, I’ve seen private equity dry up in some of the markets, before that, I was seeing money being thrown around like it, like it was all over the place. But then, uh, you know, in the accounting industry.

43:02 STEPHEN PHILLIPS: I’m seeing huge consolidations across the board because there’s just not a lot of talent. And same thing, you know, the number one conversation I have with all my business owners is how do I hire that person who’s going to allow me to slow down, not retire, but slow down. It’s just, the talent gap is huge.

43:23 STEPHEN PHILLIPS: And, and, and, I’m a Gen X or, I don’t want to say this is generational, but I don’t know if people want to do the hardest things that has necessarily requires, and I think fine. I don’t want to say it’s across the board, but finding those people has been, especially in a small market like I am, it’s been even harder to make happen. I mean.

43:48 STEPHEN PHILLIPS: Every business owner I have, if they’re trying to be a CEO and kind of go to the next level, I feel like they have to go 2 or 3 hires to kind of find the right person.

44:02 JIM BEACH: That’s true. Does take a lot. Is there a podcast that you know of, Stephen, that’s devoted to talking about businesses that are for sale?

44:12 STEPHEN PHILLIPS: I haven’t seen one. That’s a great question. You know, listen. I, you know, that’s a great question. I have not.

44:20 JIM BEACH: Let’s start that. Let’s have a podcast where the guest comes on and pitches their sale.

44:25 STEPHEN PHILLIPS: I think that’s a great idea because I think a lot, here’s the other problem I see with a lot of business owners don’t want to sell. They don’t know how to sell. They don’t know what it means. You know, they uh, I’m working with a client right now. He’s doing his business for 30 some years. He’s a really good mechanic. He’s a diesel mechanic. Okay? I, and.

44:53 STEPHEN PHILLIPS: He’s a good business owner, but he has no clue what it means to sell or how to structure the sale or how to do that. That’s a lot of what I help clients do. That with the relationships that in the business broker marketplace, the business broker marketplace, and how do you structure the deal from a tax efficient way? They’re really good mechanics. And they should be. That’s the way they build their brand and their reputation. They’re not really great business owners. They’re not.

45:25 STEPHEN PHILLIPS: They’re not in the business of buying, selling business. So most of these, I see a lot of long term family owned business, and you know, none of my kids wanted to become CPAs. So, yeah, um. So, you see it, it’s prov- these businesses have provided a great lifestyle for them, and unless they have a natural exit plan, they’re going to the market, and the market’s not giving what they want, because they haven’t thought about it 5 years in advance.

45:56 JIM BEACH: Well, also, the pricing things that is almost insulting to a 30 year diesel shop owner, right?

46:03 STEPHEN PHILLIPS: Well, it’s, it’s, it’s like telling them to, listen, these businesses, I sit, the 1st conversation I have with every client that wants to sell, they’re going to call your baby ugly. The baby is the one, your business, you spent 20, 30 years building. It’s almost like your child. I mean, you talk, you want to have a conversation, any entrepreneur, any of us on the call, you want to start talking about the business, they’ll just, they’ll gush like they have a little kid. Right?

46:35 STEPHEN PHILLIPS: Now of a sudden, part of that negotiation, they’re coming in to saying, well, you didn’t do this, you didn’t do that, you didn’t do this. It it can be almost insulting. But it’s not meant to be insulting. It’s to be practical. So a lot of times I have to be the bad guy and say, listen. Uh, the numbers are going to be the numbers.

47:00 STEPHEN PHILLIPS: But you can’t, don’t blow this deal up if this is what you want because they told you your baby was ugly. Right? And, and I, I’ve had this conversation with years. We’ve all, most of us all moved into houses and bought houses. The first house we grew up in, go back to it 20 years later, they don’t have the same paint and it doesn’t look exactly like it is. It’s not your house anymore.

47:29 STEPHEN PHILLIPS: They’re going to do what they’re going to do after your business, and that’s hard for a lot of people who have, it’s been their baby, because they, the visionaries, they were the ones that had the ideas to grow it to where it was. Now somebody else has got to run with it, and that’s okay. But it’s, uh, it’s a hard conversation out with business owners.

47:54 JIM BEACH: Very hard. I So understand what you mean about a business feeling like a child, uh, when I sold my 1st business and walked away, got in the car. I cried as I drove home because it was. It was, I had just sold my left arm and it was unpleasant.

48:13 STEPHEN PHILLIPS: You just, you sold your identity? I mean, and it’s, I have had this conversation with a lot of businesses, especially as some of my clients are getting their 60s, like, you’re gonna sell your business, every, unless you die with your calculator running, the business is gonna exit you at some point. Okay? And I don’t wish anybody to die jokingly die with their calculator running. I don’t think anybody goes into business saying that’s the way we want to go out.

48:44 STEPHEN PHILLIPS: You know, when you exit that business, you got to figure out what your identity’s going to be next because I also see the other side is they don’t have an id- their identity’s all been wrapped around that business. So if you’re planning on playing golf and you’ve lost your left arm, that’s pretty hard to play golf. Like you better figure out what your purpose is after that. Because most of the successful business owners we have are all type A personalities.

49:15 JIM BEACH: Yeah, my father retired. He was a physician and retired and did not really have many hobbies, you know, just had some, but not enough. And his big excitement was, what do you need from the grocery store today? I’m making a run. You know, that was the big excitement of the day, making a run, you know?

49:36 STEPHEN PHILLIPS: And then, and in Southwest Florida, I joke. 5 o’clock somewhere, someday, and every day. So what I find out is too many of my clients, all of a sudden they’re playing golf. They’re having a couple drinks and their health goes to crap in 3 years. Right? Because they don’t know what else to do with themselves. And, you know, that’s not a way to live either.

50:02 STEPHEN PHILLIPS: We want to have a, we, we all, like when we finally put our head on the bed for the last time, we all want to know we had the best, robust, valuable life for our families and friends, and gave everything we can, at least I’ll speak for myself. That’s what I see for most people and had the life they wanted to lead. You got to have that purpose because it’s, otherwise you will die with your calculator running.

50:31 JIM BEACH: Yes, I think that’s very true and very sad.

50:35 STEPHEN PHILLIPS: So, uh, But that’s, like I said, that’s the reality of what I see in the small business world. So, you know, to kind of take it back. That’s the challenges with small business owners. They’ve got to have a structure. You know, I get, I have business coaching. I have people helping me build structure in my business because I’m getting better. I’m trying to get better every day. And very easy to get stuck in the life, and it’s okay if that’s what you want.

51:07 STEPHEN PHILLIPS: You just gotta know what you want.

51:10 JIM BEACH: Stephen, how do I get my business ready to sell so that it sells when the others don’t.

51:17 STEPHEN PHILLIPS: So, listen, some of it, you got to be realistic what the expectation is. Listen. You gotta have great accounting. You know, you don’t have to be perfect, but like, you better. It’s, it’s funny, even me as a CPA, so many of my clients and I help a lot of clients, structuring good books, and you got to be ready to, like, ready to build it to sell. So it’s not just the numbers, it’s above and beyond.

51:46 STEPHEN PHILLIPS: It’s, you’ve got to have the right people in place because you will get more value if, if you can build a business where you can take a month off and the business keeps running, that is a more valuable business that if it’s all relying on you. Okay? That’s one two. Um, work with your CPAs, because I can tell you how many times I’ve had clients.

52:12 STEPHEN PHILLIPS: I’m not paying more than a dollar in taxes and you got to do the best you can and you screwed up if you pay no taxable income. Well, then they tell me 2 months later, they’re ready to sell. Right? There, anybody who buys a business is thinking it from a bank perspective, can they finance it? Well, if you don’t have any profit, it’s going to be hard to finance that business. And they just…

52:40 JIM BEACH: You get rid of all the profits. To hide all the profits.

52:46 STEPHEN PHILLIPS: You got it.

52:46 JIM BEACH: Yeah.

52:46 STEPHEN PHILLIPS: So you’ve got to be realistic about what you want to do, and you can’t, you know, I’ve seen too many people burn out and sell at the wrong time. You got to be every time you walk into that sale, you got to be saying, hey, I don’t have to do this. I want to do this. I’m doing it from a position of strength rather than a position of need because every sale, every buyer will see blood in the water.

53:17 JIM BEACH: Yes. Yes. Great stuff, Stephen. Really appreciate it. How do we find out more follow online. Get in touch.

53:24 STEPHEN PHILLIPS: Sure thing. My website is www.cccpas.com. Uh, feel free to reach out to me. Listen, free consultations. I’ll meet with anybody who cares about the world families, wants to do good things, and then we can talk about from what your needs are from there. But love to reach out and talk to anybody. Listen, great talking to you. Thank you very much.

53:48 JIM BEACH: Thank you, Steven. We are out of time for today, but you know what that means. Another great show tomorrow. Be safe. Take care. Go make a million dollars. Bye now.