004: Money Talks!

The Modern CEO Podcast episode four.

You no longer need permission to wait for success. You no longer need to work long hours for a glimpse of that corner office in someone else's business or your own. You no longer need to suffer through an unfulfilling job you hate, whether you created it or someone else created it for you. Because you're better than that. You deserve more. And there's a new way to do business. It's your time. Your time to be happier, to impact more people, and to design a life on your terms. The world has been waiting for you, and the time has never been better. Because you see there is a new style of CEO on the block, the modern CEO. And she is changing the way businesses are running. She's setting her own hours and her own salary. She's creating a business around what matters most to her. Freedom, family, impact. Your business, your way. The Modern CEO is here to stay.

Hey, welcome to the Modern CEO podcast. I'm your host, Amber McHugh, and I am so pumped to be here with you in episode four of this podcast. And I've got to tell you, I thought that resistance was going away. I was loving getting doing the episodes, but it seems to be back. I don't know what that's all about. I actually took a little break from recording episodes after we got, you know, the first three done. Had to process and celebrate that a little bit. And if you listen to episode one, you know what I'm talking about in terms of the resistance I was feeling. And after that, I think that break is what prompted the newfound resistance. And actually, I'm gonna be honest with you and tell you up front that this is the second time I am recording this particular episode. The first time I recorded it, I recorded it in the afternoon and I think the allergies were kicking in and it was nap time, so I sounded like a zombie. And I did not want to torture you and make you or ask you to even try to spend any of your time listening to me sounding like a zombie. So here we are in the re recording of episode four, and I'm really excited to be talking about what we are talking about today, which is not a topic that a lot of people like talking about. In fact, there is data to show that people would rather talk about politics than this, they'd rather talk about religion than this. And you know that some people try to avoid those topics in tense situations. In fact, people would also like to talk about sex than this. And they'd like to talk about other bodily functions that I am just straight up not going to name here because I don't like talking about those things. I'd rather be talking about what we are talking about today. Do you have any ideas about what that is? It is in fact, money. We're going to be talking about money because as business owners, we have got to have our eye on the financials in our business. In fact, you know, most women more so resist talking about financials more than men. You know, there is a lot of research out there to say that we don't necessarily, as women ask for the raise. We don't negotiate when we're taking on a new project and we're really resistant to that. So we're going to talk about money periodically on the Modern CEO podcast and just beef up our comfort levels and step into that space a little bit more because as business owners, this is something we certainly need to keep an eye on. In fact, those people who move to self made millionaire and billionaire status tend to talk about their money and their revenue goals with people who are in their inner circle so that they can support each other in reaching those goals. And if you want to know more about that particular research, there's this awesome book by my friend Louis Schiff who compared and did research on the difference between those people who stay in the middle class and those people who move to self made millionaire or billionaire levels. And that book is business brilliant. And I'm going to warn you before you think about diving into that book that it might push some buttons for you. It might make you feel uncomfortable and you might experience resistance to some of the topics in there. But in having conversations with Lewis, he reminded me like, hey, this is just the data. This is just what the data was saying. So when your buttons start to get pushed, you know that that's something to reflect on too, that it's just the data. It is just the data. And how do you want to engage and respond to that? So that's, that's definitely a fun read if you are looking for a new book, Business Brilliant by Louis Schiff. In addition, another reason that I love talking about money is that counting money makes people happy. And I don't even try to cite the research on this because if you punch that into Google, counting money makes people happy, you will get loads of information on this. So if you want more, just type those words right in and you will have a plethora of information to tie back to. So I was reminded of this fact that counting money does indeed make people happy. And by the way, it doesn't even have to be your own money. And like I said, I was reminded of this a couple of weeks back when I was sitting down in a back pocket tlc, a one on one session with one of my clients in Freshly implemented. And we were working on her forecast. We were looking at her revenue plans and her expenses and what her profit margins were looking like. And I was loving it. Like, why am I enjoying this so much? This is even my money. But county money, even if it's not your own, tends to make people happy. And a couple days later, I was working with another client on his forecast. I'm like, man, I am so happy for him. And heck, I'm happy too. So that flows over. So that's definitely something to think about. And of course, after I did those forecasts, I'm like, man, I'm on account money high. I better get back to and update my forecast. And I'll share with you how often throughout the year I look at my forecast and I update my numbers. If you're thinking that, oh man, you know, it's true, I really need to look at my money more. I need to get more comfortable with my finances. I'll share some perspectives for you and a structure that you may want to put in place to get started with this. And so often I hear from people that, yeah, you know, like recording the podcast, there's resistance to looking at the bank account. There's resistance to sitting down and building the forecast. You know, maybe it's because you're worried about what's going to be there, or maybe it's because it's just not an area or skill or something that you're comfortable with. But more often than not, I hear from people that once they sit down and build that forecast or they double check what's in their bank account, they start to look at their money more. They actually feel relief. Because, you know, sometimes it's not as bad as you think it is. Right? We create these stories in our heads and sometimes it's just not as bad as you think it is. And then other times it's just a comfort to know reality. Instead of operating blindly and just sort of investing in things for your business or purchasing new office supplies blindly without really knowing what the situation is. So when you have perspective, when you have your budget or your forecast in place, you are more confidently able to make decisions about where you invest in your business, about the product lines that you need to continue or that you need to expand because they're your best product lines. So There is so much that comes out of, you know, looking at the forecast and sharing your financial and revenue goals with people and heck, just counting your money every now and then or counting someone else's money. You know, I build budgets with my family members, I build budgets with my friends and forecasts and it is so enjoyable for me. And again, even if it's not necessarily my success, I'm so happy and excited for those individuals. And sometimes I think there's a resistance to sharing about financials or revenue goals because you worry what will people think? Will people judge me? And that's an us thing, right? And if they are judging or if they have question, that's a them thing. But ultimately you want to find a core group of people that know your revenue goals and that can support you in reaching them or if you don't reach them, that you can banter with them about, hey, why didn't I reach these goals? Like, can, can you help me process this? Or let's brainstorm about this and they can help you and brainstorm with you on. All right, how are we going to learn from this experience, this revenue goal that we're not meeting or that launch that didn't work out exactly as planned or this new service offering that we have that is and get crickets right now, right? We're not hitting the revenue goals we expected or wanted from it. But when you can talk through that with someone and get some elevation and get out of your head, it is such a gift. But before you dive into right, sharing those revenue goals, you have to have a revenue plan. And this is actually the first piece of your forecast or your budget. Essentially, a forecast and a budget can, can somewhat be referred to as the same thing. I prefer the term forecast because this is the forward looking view. It's not a budget that ties me down. So, you know, just different, different perspectives on that, but essentially the same thing. And if you're wondering what this might look like, we actually have a forecast template included for you to grab with this episode. So if you're, if you're driving or if you're walking, you know, feel free to come back and grab that forecast. You can start to fill out and plug in your numbers, your expected revenue numbers as well as your expenses and profit. And we'll dive into those later. But first let's talk about that revenue plan. So businesses that have a revenue plan in place tend to grow faster than those that don't. And that information is from the state of the small business owner research that was done and this revenue plan is essentially how much of something, how many units of something, how many courses am I going to sell, how many one on ones am I going to have, at what price? And then you can break that out in a timeline throughout the year, right? So if you're going to do four one on ones a month times the price point, that starts to show you what your expected revenue is throughout the year. So if you're going to do two launches a year and your expected revenue for each of those launches is whatever it is you can start to identify. All right, I've got revenue coming in at this time and this time and I need to put manage that revenue throughout the year, right? So I can forecast what my spending plans can be, where I can invest. So the top line of the forecast, the first part of that is your revenue plan. And again, that's essentially just how much of what, at what price point are you going to sell throughout the year? And you just sort of put this on a timeline in that forecast template that we've got for you then under the revenue plan. And this is typically how a profit and loss statement is structured. So after you build this revenue plan, this forecast, you'll look at actuals as well and you'll compare. All right, this is what I planned, this is what my actuals were. And you can go to your profit and loss statement or your income sheet to identify. All right, this was my revenue that actually came in, these were my actual expenses, and this is my actual profit. But first we're going to look at what's the plan, what are we expecting? And I don't think that just putting this in a spreadsheet is the reason for the additional revenue growth. I think it's because we are getting intentional about what our plans are. We're starting to bring focus to our revenue plans, which ties to how we're going to serve people and what products are people interested in buying. So these things are all sort of tied together. It's not just about looking at the numbers, but we start to become more intentional about our plans for our business. So again, now that we've got that revenue plan outlined, that's going to be sort of the top of your forecast. Then you're going to layer in your expenses. So what expenses do you have already locked in? Have you made commitments in terms of a membership or a subscription that you have? Do you have something that's already locked in and in place in terms of team members or a contract that you've put in place? Layer those in month by month into your forecast. So you can see this is my planned revenue for the month. These are my planned expenses for the month. And this is my profit. This is my profit after that activity happens, after that revenue comes in, after those expenses are paid. Now, of course, this will give you a view into, Whoa, my expenses are way too high. I didn't realize I had all these memberships. Look, I'm not even using some of these, these technology solutions anymore. So I don't need to continue this or I really do need these things to continue to grow my business. But I'm feeling a little bit stretched. So I need to increase my, my, my revenue or I need to cut something else because these are my necessities. So again, it starts to give you a viewpoint and a lens into where is your money going? And then we move to the profit line. Are you actually walking away with the number that you want to be walking away with are your profit margins? Is your profit where you want it to be? So this is important. And although profit is sort of at the bottom of the profit and loss statement, the income sheet and the forecast template that we set out before we start to see actuals, profit is something you want to keep top of mind. What are your expected profit margins? How do you want to be generating out of this business? How much do you want to be putting into savings? How much do you want to be bringing home to fuel your life? Because a better business means a better life and what, what feels good? Like, what do you need to continue to invest back in your business so you can continue to serve your clients in a way that feels really aligned? There's an awesome book out there, if you haven't heard of it, called Profit First. And I definitely recommend, if you're wondering and you want to dig more into this topic of financial management, how to look at your money differently. Profit first is a great read and they just came out with a new edition of Profit first. So I haven't read the new edition yet. I read the last edition years ago and then I read it again and actually I'm excited to pick up the new edition of Profit First. And what they do in Profit first is give you a lens into a model that you may want to think about as you're thinking about where. How should I structure and how do I set aside money for taxes? How much should I be thinking of setting aside for my savings? And how do I think about profit first versus thinking about expenses first and just hustling and working hard just to pay the bills. So the book Profit first sort of flips that standard P and L statement on its head and gives you a different model for thinking about your profit and how your business is generating income. And then what do you do? What do you do with all that income so you're not left burnt out with nothing at the end of the day? So that's a fun book to read. I always think about, you know, profit top of mind, but I still build my revenue plans in the traditional way with revenue on top, then my expenses and then my profit. But even though that's at the bottom sort of of this forecast template that we have for you and of most piano statements, it's not something that you want to be an afterthought. So keep in mind, what is my profit target? Not only what is my revenue target, but what is my profit target? And that helps you understand, okay, here's how much we can be spending in between or start to analyze again, what are the adjustments that we need to make to get where we want to be. So definitely check out Profit first in addition to grabbing that revenue of the FOREC template, if that's something that you are ready to step into building. Now, as we think about the revenue plans and how often should you be looking at your expenses and updating your forecast? I'm going to give you some perspective into what I do and what works really well for me and what doesn't work so well. So I typically tend to look at my forecast and my financials definitely twice a month, the 15th and the 30th of every month. So it's on my calendar. If that falls on a weekend, typically I'll do it on the Friday before, but in those instances on the 15th of the month, it's a little bit of a lighter review. We look at what expenses need to be paid. A team member of mine is paying anything that came up confirming that these things are okay to pay. We just sort of do a quick check and a balance. Now in one of my business, actually a team member pays some of those bills. In the other business, I also pay our team members numbers on the 15th and the 30th and do some calculations around that. Then on the 30th, I do a more extensive review. I review the forecast, I make any updates to the forecast and I compare forecast to actuals, year to date, month to date, etc. So twice a month I'm definitely sitting down and getting cozy with my money. In my business, there are a couple of exceptions to this. I tend to look at my financials more when we are launching. So when I'm in launch mode and I have a goal of a number of people that I want to work with and I want to serve through this launch, I look at that a little bit more frequently, probably daily, if not multiple times a day during that launch to identify, you know, am I on track to serve this number of people? And then when enrollment opens, for example, for a launch, I will also. Every time an enrollment comes in, every time someone signs up to participate with us, for example, in freshly implemented, I recognize that individual. I write their name down. Typically, I do all this in spreadsheets, but when I'm in launch mode and we've got there are people that we are welcoming and inviting into our world, I actually write their name down on a calendar or a chart on my wall and I recognize them. And every day as we go through that onboarding process, I'm thinking about that person and how I can best serve them. So I do that a little bit more frequently. Of course, when we have open enrollment for one of our programs. In addition, when we have big expenses in our business, I'm also looking at the financials a little bit more to make sure I'm not overspending, to make sure I'm on budget with a big project, for example. So I might look at my budget a little bit more. It's not necessarily daily, but it might crank up to weekly or twice a week. Again, when we have a big project happening that has more expenses. Now I do the same things in my personal life. There are so many facets of business. Organizational development, coaching elements, personality tests, all things that we can talk about in the future on the modern CEO podcast as well. But all of these things, not only do I embrace in business, I embrace in my personal life. My husband and I'll sit down. Actually, this is so nerdy sounding, but last Saturday night, we spent tons of time reading through our Myers Briggs personality types and analyzing. Is this right? Is this you? Yeah, that's me. No, that one's not quite me. And I was actually teetering. I've recently retaken a personality test and I came up a little bit differently than I typically do. I'm typically an entj, but I was showing up as an enfj. I'm like, this is weird. And my husband and I compared and we went through both of them and he said, no, no, no, you're definitely more of an entj. After we reviewed that again. And then we also went through his personality Type and sort of broke down and told stories and laughed as we went through all of that. So so much of what we do in business, we also can use and learn from in life and the other way around. Right? So in from a personal perspective, when we're managing our financials, we do look at the budget twice a month. We look at the budget a little bit more closely. But I actually look at our bank accounts weekly. And again, in life, if we've got a big project going on, if we've got a big move that's happening like we did last year, or some big expenses coming up, I might look at our financials and our bank account a little bit more frequently. And some of this stems from, you know, just my personality type and who I am and how I like to review and manage our financials and not have big surprises. And my husband, on the other hand, doesn't mind if there are surprises. He sort of rolls with all of it. And he is focused on getting, you know, the job done. He's focused on getting us packed or getting us moved and running out and grabbing supplies as he needs them. So I then counter that with, hey, like, let's look at what money is in the account. Do we need more? Do we need to move some things around? Are we on budget? Are we off budget? And let's just update that. And it's not usually an argument anymore. There were times early in our relationship that we might have argued over some of these things because I'm like, what? What just happened? I wasn't expecting all that money to be spent. We just blew my budget and I have bills to pay. But now, because we are in a flow and we have routine around this, it's more of a conversation around expectations. So neither one of us is surprised about, you know, our financial situation, and we are have goals that we are working towards. And I've got to tell you, when we are working toward our financial goals together, and we both focus on those things every single time we meet those goals. So it's one part working on that and focusing together and having a vision, but it's also right, one part manifesting. So all of these things sort of tie together. So in my personal life, definitely looking at everything very closely, budgets, forecasts, paying bills on the 15th and the 30th of the month. But I actually look at our bank accounts weekly in our personal life, and if we've got something big going on, I might look at them daily as well. So that is our money talk for today. I hope that you got some tidbits out of this episode, and I also hope that you've identified some action steps for yourself. Whether it's, hey, I need to get cranking on my revenue plan, or, hey, I've got my revenue plan, but I should probably build that forecast and start to compare my forecast to my actuals. Or maybe you've got all this going on your business, but you want to start to apply it in your life as well. Or maybe it's the other way around. So whatever it is, I hope that you've identified just one, even just one action step that you can take away and start to implement in your business. Because a better business means a better life. When we have an eye on these things, we're more likely to reach our goals because it's something measurable, something tangible, and we start to get intentional about how we're going to serve our clients and what that looks like all around. So all these things weave together really, really, really nicely. And now it is time for our theme songs of the episode. And it was hard to pick these theme songs because there is so much that is rolled into a song about money. So I've actually got two for you, and you might have a better theme song for us. So give us a shout out on social media if you're like, no, this should have been your money theme song. I'm very open to hearing from you on that, but I'm gonna go with the first one and then we're gonna end on the second. And I am not gonna sing the second one because I do not want to hurt your ears. I can't do high tunes very well or without, like being really high and really loud. So I'm gonna sing the first one and then the second one. We are just gonna let the fabulous Ingrid Michelson sing. So here's the first one. She works hard for the money, so. Okay, I'm gonna leave that one there. And then our second one is such a favorite song of mine. My sister and her fiance actually sang this at their wedding. It was a big sing along and it was a total blast. So I've just got some fun memories of this. You may know this. It's a little bit more upbeat.

Don't you worry there, my honey. We might not have any money but we've got our loans to pay the bill. Maybe I think you're cute and funny. Maybe I want to do what bunnies do with you if you know what I mean. Oh, let's get rich in my parents homes in the south of France. Let's get rich and give everybody nice sweaters and teach them how to dance and build a house on a mountain making everybody look like ants way up there. You and I. You and I.

And that's a wrap for episode four of the Modern CEO podcast. I can't wait to catch up with you in our next episode. I'll talk to you soon.

Sam.