Cash Flow and Profit First Tips with Kevin Davis

January 11, 2016

Cash Flow and Profit First Tips with Kevin Davis

Show Summary

Kevin Davis joins Mike Michalowicz, Chris Curran, and Kristina Bolduc for Episode 62 of the Profit First Podcast! Kevin shares his story about his business and what he has been struggling with; Mike gives some great tips on setting up the Profit First system.

Our Guest

Kevin Davis is a serial entrepreneur currently running 4 businesses, with another on the back burner.

He has run a successful web, graphics, and app development firm since 1998, completing projects for both small and large businesses. In 2011 and 2012, the market shifted, and the days of large revenue projects began to dry up.

Like most entrepreneurs, Kevin looked for a solution, and opened a detailing shop, going back to his car-guy roots. This provided not only stopgap revenue, but also lead to the invention of a product for the automotive industry.

In 2014, he launched Detailer’s Helper, a detailing product brand, primarily focused around a unique paint-friendly tool belt for detailing. Thanks in large part to a give-lots-of-free-advice social media strategy, it has grown quickly over the last 15 months and is Kevin’s primary business focus. The brand has lead to some fun opportunities, including a spot on a new Velocity Channel (from Discovery) show called Competition Ready.

In addition to the automotive niche, Kevin is expanding into other brands around the same product, and will be launching The Helper, a similar product for the consumer market, and Little Helper, a kid’s version in the next month. Kevin has goals for securing several large retailer PO’s in Q1 of 2016.

In 2012, Kevin also invested in a vacation rental business in Orlando, which was a deliberate move to not only generate sustainable revenue, but to also provide a respite for the long Montana winters. He’s been fortunate to enjoy over 80% booking rates in a market that typically sees 48%. He hopes to expand this business into another property in Grand Cayman, and is currently working on an e-course to teach others how to systematize their own vacation rentals (currently on the back burner).

In addition to the business endeavors, Kevin is a die-hard car guy, and just finished a six-year project, building a 1965 Shelby Cobra replica.

Kevin and his smokin’ hot wife live in Montana with their two girls (17 and 16), and carry the entrepreneurial theme throughout their lives. From a 12,000 mile camping trip throughout the US, to Spanish immersion school in Costa Rica, and trips to Brazil, they take a very “why not” approach to life.

For the record, Kevin also enjoys sunsets and long walks on the beach…in Grand Cayman.

Show Quotes

Use the 4x rule: when you sell products direct to consumer your minimum markup should be a 4x markup for premium products.

Cash flow is king. If that money is not collected it can destroy a business. Inventory flow is a big deal… the faster you can clear that out the sooner the money is released to you.

When you have multiple accounts in place, you will start to notice things you are spending money on that you should NOT be spending! Parkinson’s Law. When we see that the money is available, we spend it.

You do not need to make an adjustment for cost of goods sold because these are considered expenses. Instead, setup a unique account for your “real revenue” and subtract it out. That’s when you’ll know how much money you’re actually making.