Planning on a Profit First Creative Business with Amy Laliberte - 56

Creative Counsel Episode 56: Planning on a Profit-First Creative Business with Amy LaLiberty.

Welcome to Creative Counsel with Brittany Ratel. I'm your host Brittany, an attorney for creatives who believes in solid contracts and cute office supplies, and who wants to empower you to be a more confident business owner. Whether you're a creative, influencer, maker, artist, shop owner, or content creator, you are not just a blank. You are a real bona fide business owner. So let's help you own your business and get you legally legit with Brit. Thank you so much for being here. Welcome back, creative entrepreneurs, to the podcast.

I'm so excited to have you guys here. Um, before I introduce our guests today, um, I just want to give a little context. So I met Amy LaLiberty last year actually at Alt Summit. So that's in 2019, which I just got back from. That's why I have a little bit of a frog in my throat. I actually caught a nasty bug on the way home and probably because I was partying pretty hard at the conference. And by that, I mean talking to everyone about their business and getting involved with the dance. Battle with a client. So, and if you know me, and certainly if you know Amy, this little Mickey, then actually that sounds perfectly normal. But all this is to say that we're a little behind in our production schedule here, but you know what, we're going to push on anyway because February's book for our Creativepreneur Book Club was Profit First by Mike Michalowicz. And if you have not had the chance to dig into this book, or if it's one of those that's like threatened to topple over on your nightstand— I don't know if there's any people out there who collect books like I do on their to-be-read list— then you are, you are in luck and you're in for a big treat with this episode because Amy is going to break down. So whether you've read the book or you haven't read the book, I know that you're going to get a lot out of this episode with her. So Amy LaLiberty has built her business around the one part of business that a lot of entrepreneurs, and especially creative entrepreneurs and online entrepreneurs, struggle with: creating precision from chaos in business financials. She's the owner and founder of My Virtual CFO and brings her signature blend of easy-to-understand language meets Whip Smart Strategy to Traditional Profitability and Bookkeeping Services. So I know you're going to love this dive that we have with her all about how to implement Profit First in your creative online, um, modern business. So let's hear from Amy. Um, and make sure you dig into the show notes. There's a freebie, a profit calculator that Amy has shared with us that's super handy that walks you through the process of plugging in your numbers and how to find out what your own profitability is right now. So let's hear from Amy LaLiberty.

Hello everybody, and welcome back to the podcast. I'm so excited to have Amy LaLiberty here to chat all things Profit First. Welcome, Amy.

Hi, Brittany, how are you?

Doing great, doing great. And just super excited to talk about all that money, honey.

My favorite topic.

I know, one of mine too. And if it's not yours, then we're going to make you, you know, we're going to make a dangerous challenge right here that we think you can maybe change your mind because money's great. Money's Your Friend, and we're gonna talk about some really easy and tangible ways that we can maybe approach and shift the way that we're looking at this to make sure that we're really making our money and our businesses work for us and not the other way around.

Yeah, that sounds great. So you wanna get started?

Yeah, definitely, let's jump in. Well, tell us a little bit about kind of Profit First and what you do using kind of Profit First for businesses. That's our February book club book for those of you that are in my Creative Entrepreneur Book Club. But for maybe those who aren't as familiar with the book, or maybe they've heard it but are like, what exactly is all about Profit First? Why don't you kind of give us a rundown?

Sure. Before I do that, because I love to do it, I just want to introduce myself because all they know is that my name is Amy. But my name is Amy Laliberte. I am a CFO for hire. My website is myvirtualcfo.co. And I am a— I do bookkeeping services. I do CFO-level support for 6- and 7-figure business owners. And I'm also a Certified Profit First Professional, and that's what we're here to talk about today. I actually go way back with the author Mike Michalowicz. I met him when he had just released The Toilet Paper Entrepreneur, which was his first book, and I had followed him along through that. And when Profit First was released, I actually didn't have a business yet, but I read it and I thought, wow, this is like a really smart way to address finances, especially those who don't have a healthy money relationship or who avoid their finances, which are a lot of people, just because they're afraid of what they mean and what they represent. So what Profit First does, it's not a replacement of an accounting system. What it is, it goes on top of this accounting system and it helps you manage your cash flow using what we like to call smaller plates, but ultimately it's multiple bank accounts in order to really get a nice healthy snapshot of how your business is doing both operationally as well as profit. Because we believe that with profit, the accounting equation is sales minus expenses equal profit. And we believe that you should take your profit first And so it's sales minus profit equals expenses. Because if you take your profit first, what you have left over is what you will use in order to drive the business.

Right, you'll, you'll burn basically the ships behind you. This is the only money you have left. You have to make it work with that instead of the other way around, which is that sometimes, you know, the— just like the adage of, you know, a gas will fill whatever container you give it. You know, if you say expenses can be up to this amount, shocker of all shocker, every month that's how much you are paying in expenses every month.

So 100%, and I think one of the things that is consistent regardless of where you are on your entrepreneurial journey, um, whenever I do Profit First assessments with, um, prospective clients and with clients, it, it is the operating expenses are always the one item that are just proportionately out of whack. And it's because I think people are, you know, they're especially in the creative and online space, software is like the thing that everyone is like, oh, free trial. And then you get the credit card and then it starts like, you know, $20 a month for this, $20 a month from there. Before you know it, you're spending $1,000 a month in software and you're not even using it. So what we're able to do is take those sorts of categories within the accounting and we're able to turn around and say, okay, what can we dial down on the expense side in order to increase profit, to increase your owner's pay, and also to put money aside for taxes.

Yeah, exactly, exactly. So I mean, it seems, you know, I think what's great about Profit First is that it is both simple and difficult at the same time, which is that it's easy to explain and people are like, oh, profit first, I should have a profit. Yeah, that all sounds good. So why, what makes it so challenging? Why do people still probably need help, maybe reading the book, maybe chatting with someone and implementing a system like this?

I think the reason why, it's because, like, just think about it for, like, dieting, right? So, like, I implemented Profit First from day one in my business. I was also 40 pounds overweight when I started my business. I lost 40 pounds over the course of the last few years, and it was because I consciously made the decisions, and I had to stick with it, Despite the fact that I wanted to have like the ice cream sundae or the extra glass of wine, I had to make these very thoughtful and deliberate decisions and be intentional. And that's the same thing with Profit First. It's, it's if you're dealing with a smaller plate and you have, let's say that you've got $500 for the rest of the month in order to pay for all of the things that you need to pay for, then it really forces you to think about how am I going to get from here to hear, "If I only have this." You really have to have, it forces you to confront the realities of your business and to be able to make course corrections quicker than you would if you didn't have a relationship, if you didn't implement Profit First. I think what, so it's just sticking to it. It's like just creating a new habit. You have to stick with it. Yeah, you might have a slip-up. Yeah, one month you might go over, but You know, at the same time, if you are consistently acknowledging where the mishaps are, you can do the correction and then pivot and make the changes that you need to make.

Yeah. Instead of, you know, by the end of the year, you're looking over your numbers before you hand them to your CPA and you're like, oh, well, this will be fun surprise time. I'll look and see how much money I made and what my expenses are, which is, you know, obviously too late to do any meaningful change. You know, all of this has now come and gone and it's way in the past. You know, that's removed you from that situation. So, um, I like what you were, you know, were saying in terms of it, um, it's something that forces you to self-confront, and it, and it really forces you to be creative in your business. Because like you said, if things have to fit in this plate, it's, you know, like a lot of people are familiar with the envelope system and budgeting, you know. If I, if I have to make, you know, groceries work out of this envelope, I'm going to get creative. And a lot of us, and especially a lot of my listeners here, are creative business owners. They really like that part about themselves and about about their approach to entrepreneurship. And there's no reason why you can't also, I think, channel some of that and increase some of that in your approaches to your finance as well.

No, I completely agree. And I think one of the things what I found when I've worked with, with my clients that, that want to implement Profit First, some of them have already started implementing it. And one of the things that we do right from the beginning is I'll do the implement— I will do the assessment over because sometimes Let's just say that you are a photographer and you have to, um, you have, uh, staging, photo staging that you need to do in order to, to take your photos. Well, those are costs that you need to do to have in order to deliver the product. Or let's say you have an assistant photographer as well. So what happens is a lot of, um, new-time, uh, business owners just implementing Profit First for the first time don't consider all of the expenses as Okay, total revenue is that number and then everything else is expense. But if you turn around and you look at it, you can say, okay, if I have $100,000 in revenue, but I'm paying for merchant processing fees, I'm paying for the assistant in order to be my second shooter, I'm paying for the props that I need for the staging, what really happens is you take that total revenue, you minus out all of those what like in accounting terms would be like cost of goods sold. And then you get a real revenue number. And from that, that's where you really then have the ability to drive your business in terms of how much do you have to spend on operating expenses? How much do you have to pay yourself to put the money away from taxes and to pay profit? And oftentimes a lot of clients of mine don't consider that from the get-go because You know, you could have a million-dollar business, that's awesome. But if you have $500,000 that is going right out the door in order to deliver the product, when it comes to Profit First, you have a $500,000 business that we need to course correct. Because in Profit First, the real revenue number is what drives the maximum percentages. And so if you are trying to fit yourself into a million-dollar business, and you're not finding success, chances are is that you've got expenses that are, that are above that line of real revenue. Does that make sense?

Yeah, no, no, totally. So, and I think it's also, it's a really good exercise to, to kind of counteract some of the comparison trap that we can get into, or, you know, what I think is especially pervasive in online business, which is, you know, everyone flaunting, oh, I'm part of the 2 comma club, or I've got a 7-figure business, or I hit this. Which may be well and good, you know, let's celebrate success where success is due. But what people maybe not be as sharing and be as forthright in, or even just not be like, you know, being, uh, being honest with themselves, is what do the expenses look like on the other side of that? Because, you know, if you have to put in, you know, $99 of Facebook ads to get to— for a $100 business, like, that's— I mean, you're making something, but it's not a great business. Like, yeah, no, yeah, no, um, I, I—

it's Oh gosh, I'm gonna forget that phrase, but it's revenue for vanity, profit for sanity. I think that's what the phrase is. Yeah, and you know, like, I think it's awesome if you wanna have a 7, 8, 9-figure business, that's great, but what I'm suggesting is that we all work very hard for whatever size business that we have, why not, consider how to maximize the profitability of the business. And I think what often happens is people get really weird about like having to pay tax and they try to do things in order to avoid paying tax. But in my mind, if you're paying tax, then you have a profitable, healthy business. Tax is a sign of health, believe it or not.

Yeah, oh, I really like that, flipping that instead of no, no, no, you know, let's let's, you know, expense everything to death and just, you know, get that tax liability to zero. That, that means that something's wrong there, you know. Like, I love what you said because I met you last year at Alt Summit and you did a presentation and you talked about one of your exercises that you do when you have to send off your, your tax payment is you go on like to the National Institute of Health or, you know, some— pick some part of the government. I know a lot, a lot of us don't love maybe how our government's being run or how our money's being spent, but there's got to be some agency that some initiative, some project that you can get behind, and you go look it up. And then, you know, think about that. You can even write it on your check if you want to in the memo line and think about, hey, I am going to go fund a study, you know, I'm going to go help this, you know, classical music project that's happening in underage kids, you know, because it's part of the National Arts Initiative. Whatever it takes for you to kind of flip that script and say, I am happy to send my money in for that, because you can just believe that those are what your dollars are going to.

Exactly, exactly. And I don't think there's any harm in that. If anything, I feel like it then sort of distills like any sort of like negative connotation of having to, to pay. But no, I, I think that's great. And what's even better is with the Profit First system, if you are, if you're implementing it like at the most basic level, there is a tax account. So I know people get really uptight about like not having the money for tax season. Like this forces you to have the money saved so that you can pay your taxes. You don't have to put a payment plan in place with the IRS or with your state. You can just pay your taxes at the time that they're due. And that is such a great feeling, not having to worry about that. I actually, it's always fun at the end of the calendar year when you're looking at the results of like a full year of implementation with Profit First and you're seeing the results of clients who have paid off thousands of dollars, tens of thousands of dollars of debt, and they've been able to, like, they're not starving for, you know, they're doing it in a very healthy, deliberate way. And that was something I wanted to say earlier. You know, let's just say that you have a $100,000 business and optimally you wanna be like in the Profit First, like, table that you would see in the book. You know, the optimal for under $250,000 would be, 50% owners pay, 15% tax, 5% profit, and 35%, I think that's the number, right? Yeah, 35% for expenses, right? So let's say that you're doing that, and when you run your assessment, let's say that you're not paying yourself, and you've got 60% in operating expenses, you've got maybe 2% in tax, everything is out of portion. We do an implementation over a gradual period of time. If someone had 60% in operating expenses and they try to pull themselves into a 30% operating expense, they're going to hemorrhage their business. So the other way that you are able to successfully implement Profit First is by doing it in a very incremental way. You know, again, back to the weight loss analogy, like I needed to lose 40 pounds. Like if I just focus on, pound 40, that would have been quite miserable. So it was like 1 pound, 2 pounds, 1 ounce, 2 ounces, you know? Like, it's just like, yeah, and that's how it is. It's like that very small incremental change. And then like, it's almost like paying down debt too. It's like, you know, you do it in a very, you know, snowball, roll it up, and before you know it, you're like, you're paying off a lot of debt all at once. And then when it's gone, it's just this like, weight lifted off of you, but you're also seeing the momentum of your progress.

Yeah. No, I think you really nailed it there, that it's being reasonable with yourself. It's a right mix of like, "Hey, I'm gonna coach myself. I can do better here, and I'm capable and confident of that," but not beating yourself up or just going into a shame spiral where you're like, "Oh, look at me. I was so dumb," or, "I spent so much money, and I just, I can't figure this stuff out," because that's not helpful to any kind of behavior that you wanna change. You know, there's got to be a happy middle there where like, yes, I— maybe I could have done things better. Well, now I know more and I'm going to do more and I'm going to move forward, you know, and there's a good place for that. So, so what if— and I probably— we probably should have started this, but what about if we're in a place with our businesses and maybe the way we run, and maybe because if you identify more as a creative and kind of that, you know, right brain, what if kind of the whole topic of numbers just makes us feel yucky and crunchy and we're just like, no, I'm not good at that, or my partner does that, or I just hire that all out, or my husband takes care of that, or whatever. What if we're in that place? What are some ways that we can maybe start to move into maybe a healthier place with our numbers, have a better DTR?

Right, for sure. Well, yeah, I mean, I think that, I mean, what we were talking about before we started the call is that, you know, like, you know, I'm not like, I'm not the best at like, you know, posting on social media. But like, I can do better by why? Just like maybe posting once a week. And so like, if somebody who claims that they don't have a good relationship with money, I would argue that you need to take a timeout and really unpack what that's about. And so it's really about examining like, where do those money stories come from? Because chances are there's something, whether it's like, extreme, you know, where, you know, I shared my story at Alt Summit with like my parents, um, you know, filing for bankruptcy and that having this very like hard like reality of what my, my family's financial situation was. It could very well be that like you weren't good at that, like you were embarrassed in when you were 10 years old that you didn't know what 5 times 5 was, and so therefore your story is that you're not good at math. Well, I think that you need to, in order to grow, we need to turn around and examine what those thought patterns are and really decide, do we love our business? Do we love the creative, the creativity that we're able to do and make money from it? And are we willing to step into an area of discomfort in order to become a better creative and to have a better relationship with your money? And I think like with Profit First, it's a really simple way for you to do it. You can turn around and outsource your bookkeeping because it doesn't, you know, you're not concerned about like, I need to know where, you know, that expense categorizes on like my accounting software. But if you're implementing Profit First, at any point you should be able to log into your bank accounts and see like, okay, like I'm gonna, you know, the, the 10th is coming up, I'm going to like, I've got $10,000 in my income account and it's all going to get pushed down to all of the different categories I have. And it really helps you understand where you can start having that relationship that is a healthy relationship, because a healthy money mindset will lead to greater creativity, will lead to greater business. It's not an adversarial relationship. It is a harmonious relationship.

Yeah. Oh, I totally agree with that. And I think, like you said, that It allows for there to be space in your business, not only in your, you know, space in terms of what opportunities you can create, and it allows you to sell, to price, to look at new offerings from a place of confidence and security and not from a place of scarcity and fear. Because if you're not sure about where your money is, then I think it's really hard to make good and wise decisions about, do, do I need to raise my prices, or do I, do I have the opportunity, can I hire this person, can I move and pivot in this direction, um, I think all those decisions become much more, you know, um, gut-based than they need to be. You know, there's always some element of that, but I think, you know, a well-reasoned approach would balance and have like, look, I've, I figured this out and I can't afford this, it's going to be a stretch for a few months, but there's a plan for this, versus like, well, here's to nothing, let's just move forward and, you know, cross our fingers and hope for the best.

Yeah, well, and I think the other thing is, is that when it really boils down to It's just math, and it's such simple place. It's like 2 2 4. If we're making 4 mean that we are an awful person, that has nothing to do with the accounting or the finances. That has to do with something completely separate from this. And so if you can find your way into a neutral position when you do your, your Profit First implementation, or if you do your bookkeeping, It doesn't mean anything about you as a person. I mean, we know people who have all the money in the world and they're just miserable, unhappy people. And we know people who have all the money in the world who are like the kindest people. Like, it takes all types. It doesn't— like, whatever's in your account or not in your bank account doesn't have any correlation to you. It just means— it's just a number. And you get to choose what that number looks like if you want to take thoughtful and deliberate action. And that's what Profit First allows you to do.

Yeah.

And I exactly agree that it's the story about that number and what you're telling yourself that's maybe what needs to be unpacked there. Because, oh, you hit that, this is what the number was last year. What does that mean about you? Maybe you're not a great entrepreneur. Maybe you didn't figure this out. Maybe you were too risky. Maybe a million other things that could be part of your narrative there. Um, But those numbers aren't saying that they're dumb. The numbers are just there. That's, that's, that's you and what's going on in your head. So, mm-hmm. Mm-hmm. Yeah. Which is a lot more difficult to unpack. And it's, yeah, sometimes hard, messy work and confronting, like you said, some of those maybe demons of things that we learned, um, you know, growing up or other, you know, narratives that got based upon choices or, you know, conditions or whatnot. Um, that I think are all part of, I mean, and what a cool experience to have as an entrepreneur that you get the opportunity to really unpack that and to do some self-coaching on yourself. Um, and to do it in a way that will allow you to move forward and be smart with your numbers.

Yeah, for sure. And I think the other thing too is that when you're looking at everything and it's— when you're working with someone that's a certified Profit First professional, you can work with someone who's like a CPA Profit First or a bookkeeper or a coach. And so maybe you already have a bookkeeper and a CPA who like, who has like all of this covered, but you really need to work with someone with proper experience. Like, they will be able to help you examine all of the, um, the stories, the money stories that you may have surrounding that. And, and that might be the piece that gets you from, from taking the first step. Um, one of the other things that I wanted to mention was that often one of the roadblocks is when you go to the bank and you want to open up the accounts, because people have— I mean, I remember when I opened up my account, I love my bank, and they're like, why are you opening up all these accounts?

Yeah, I'm the same thing, because I did probably first last year when I read it, and they were like, how many? And I was like, I kind of felt embarrassed, and I was like, why am I embarrassed about this? These people are working for me. Like, this is all— I'm not, you know, I'm not putting them out, but like, they like checked, like, you want 5 different accounts, and I'm like, yes, that's exactly what I want.

Yeah, right. And it's— and what if— I mean, there's some banks where they will charge you to have those multiple accounts, and then there's other banks who may not charge you, but the expectation is that you have a certain amount of money in the accounts collectively, right, to not— and either way, I just feel like it's like the cost of like a minor, minor cost in order to do something that will be life-changing for you. If you implement Profit First and you stick with it, you will see the results. I have seen them time over time, and you don't have to be like a multi-million dollar business. You don't have to be a multi-six-figure business. You could be a $50,000 business implementing Profit First and, and, and being a boss because you're actually in relationship with your money and you know exactly how all of that money is being allocated and you can show up for yourself and for your family.

Exactly. So yeah, that's, that's going to be the pitch right there. Okay. Is yeah, you get to be a real boss. You get to be a real business owner, which means that you haven't just given yourself a crappy job. So I love that this is coming on the heels. Our book last month was E-Myth, which I think that these two pair so well together because it talks about Working, you know, on your business and not just in it and coming up with, you know, zooming out and getting that bigger picture. And I think the next step of that naturally is to get your money under control and knowing, you know, I love that you talked about exercising another podcast interview I listened to that you said, you know, it's good to kind of start and think about what money do you need, you know, when you're looking at kind of going back and looking at pricing and kind of build up that model. So I was thinking about that. So from people in my audience who may be still in that side hustle stage where they're still kind of experimenting, either maybe they're, they've got kids at home or they have another job, I think sometimes it's hard to kind of approach that part of the money mindset because they're not sure if this is even a real thing yet or how much they should be. And what would you suggest in terms of how do we start kind of that question of, well, how much money, you know, should I be making when maybe, maybe they're not even ready to call this out loud a real business yet, you know, because of a lot of reasons, you know, that we kind of talked about.

Yeah, so I think that, you know, here's the thing. I mean, time is the thing that we can't reproduce, right? Like, we can't— like, it is what it is. We all, we all have 24 hours in a day. And so if you're choosing to spend that time experimenting on whether or not, like, the entrepreneurial life is, is, is right for you, I think just looking at what is it that you want to offer? Again, let's go back to like the photography thing, 'cause that seems like I'm obsessed with it. I had a conversation with one of my clients who's a photographer this morning, so that's probably why I keep coming back to that.

Yeah, no, photography's a great fit. I know there's lots of photographers who are listening in, so yeah.

So let's say that your session fee is $100, and let's say that it takes you, and let's say that you're working full-time right now, and let's say that you're making $25 an hour. So then like that's a good point of reference to say, okay, am I, is there a correlation between how much I make in my 9 to 5 job versus what I'm looking to in this like experimental thing? So if you are gonna spend an hour taking photos with a client and you're charging $100, then it's like, okay, $25, okay, that's 25% is your owner's pay. And then you just start looking at it from that standpoint of like, okay, am I really, am I pricing myself where I need to be, where this actually correlates to what I'm making right now? And I think oftentimes we think, oh, this is just a side hustle, we shouldn't be comparing it to what we do in our real job. But ultimately, even if you aren't sure if you wanna make the leap, it's good to kinda say like, could I make it? And just think in like a realm of possibility. Is it possible for me to replace my 9-to-5 income by doing this. And if you start looking at like a profit first, like not even having to like run the numbers, but if you just take the book and you say, okay, I have a business under $100,000 or $250,000, okay, 50% of everything I charge, I'm taking and paying myself. I'm gonna put 15% of it away for taxes, 'cause I'm going to have to pay that. And then I'm going to do operating expenses, which might just be like, I need to get a new camera lens and I'm gonna put money aside to save for that new lens that I need. And then I'm going to pay, you know, X number of dollars a month for like my website or whatever it is. And I think that just looking at it from like a very, like, I'm not, I do not advocate for businesses to use Excel spreadsheets because I think once they start growing, then they have to convert it and that's just a big pain.. But if you're just sort of experimenting, you wanna keep it to yourself, like just look at a spreadsheet and just put in these percentages. As a matter of fact, we talked about before, Brittany, that I would, I would share that, that download for you because that would really help you like put in a calculator and say, okay, how can I do this? Mm-hmm. So I think it's just a matter of like playing with the numbers to see what is possible. Yeah. And then checking in with yourself, like how does that feel? Does that feel, And don't think that if you say, oh my God, I can't possibly take $50 'cause that's not what I make right now, like just breathe into it because it is possible that you can make $50. You might not be making $50 an hour in your current job, but that doesn't mean that you can't make $50 in your next job or your business. So it's just really making it work. And how great is it that if you, for every 2 hours you work 9 to 5, if you have that $100 session and you're making $50 off of it, that's for 2 hours, you could do 1 session. Like, how amazing is that? I think oftentimes people think that to get from their 9 to 5 to their side hustle is something that has to take a, you know, a very long time. If you're really pragmatic in relationship with your numbers, even if it's just from like a very simplistic way that I just explained, to get there, it's really not going to take that long. It's just your limited beliefs that's causing you to have that, that pause and, and, and questioning whether or not what is possible, right?

Anything is possible. Yeah, yeah. I, I think people would be surprised that that runway is not as big as they need it to be, um, for them to be able to start making plans and make a leap and what that would look like for them. You know, even counting that there are there's obviously usually a little bit more risk involved with doing your own thing. And because there's not necessarily getting the paycheck every month, if you're not out working, if you're not building up your leads or whatnot, then yeah, you're right that that money's not coming in. But even aside from all of that, those are things that you can start to play around with and at least start to have some good discussions and more information so you can make better decisions.

Decisions. Well, yeah, and the other piece of it too is that if you do have, like, back to the photographer thing, let's say you're a wedding photographer, there, at least in northeastern part of the country, there's a seasonality to it. Like, summer and fall are the popular days, and like, we're in February now. Like, the winter is not typically a popular time to get married in the northeast part of the United States. But if you know that and you know that you're going to be working a good chunk of the time for 6 months out of the year, You can use Profit First to create a vault that will just tuck your money away so that you can then not be in a panic come January, February when you're not getting paid. You are just, you're living off of the fruits of your, it's like harvesting, it's farming. You're living off of the fruits of your labor from your peak season.

Right, exactly. And yeah, you can make sure that that income is, yeah, everything's tucked away in the accounts it should be. So you're not having any fear, you know, you can, you're still gonna be able to make your tax payments, you're still gonna be able to pay yourself, you know, things can continue as normal if, especially if you have, yeah, like you said, a high season and a low season business.

Yeah, for sure.

Absolutely. Awesome.

Um, one of the other things I wanted, um, to have you share is some of your kind of financial truth mantras. You talked about some of these in your presentation and I thought they were so great. Um, so one of them that was started with, and you said like, I pay myself consistently and give yourself, um, you know, tell us a little bit about what's, what's with these financial truth mantras and what are we trying to, you know, what's the, what's the point of these?

Yeah. Um, so again, what it comes down to is that you can turn around and like run the mechanics of Profit First, but if you're not in relationship with yourself about your money story, you can implement this, but when it comes to a point where you're going to have have to make a very conscious, deliberate choice. If you're not— if you don't have this truth within yourself and a level of self-awareness, it will make it so much harder for you to make what could be perceived as a tough choice. So what I do is I recommend that my clients— and I always ask them, you know, what is their money story? And everybody has one. And it's— it doesn't have to be like a tumultuous like, "Oh my gosh! This is what happened and I lost everything and I did this and this." But like however it is, it is and then you just examine it and you just say, "Okay. What are the things that I have some real feelings about?" And then we turn around and we start trying to work towards a level of acceptance because I think so often we're like telling these stories of our past when we really should be addressing them presently so that we can make better future decisions. So the mantras are more of these daily affirmations of, you know, I pay myself because I work hard and I provide a quality service for my clients. And as a result of that, I reward myself with deliberately providing for not only myself but for my family. And doing those mantras every day because at some point though, I don't believe in writing mantras that you don't believe in. Yeah. They have to be ones that you can actually— because you can turn around and say, you know, "I love myself.

Everybody likes me." But if you really don't think that, your brain's like, "I call BS on that." Like you have to be able to like do little leapfrogs, I think. You know, you got to lead your brain along. Along the gilded path towards something that's actually believable.

Yeah, right. So if, you know, there are people who don't pay themselves, and that just— and some of it is, is that like, I don't need to pay myself because my significant other is our breadwinner and they're the provider. And great, but it's, it could be very— it's not about like you having to pay yourself in order to be a contributor to your family, but it could be that I pay myself as a token of appreciation for the work that I do for my clients.

Yes.

And it could be that if you're someone who struggles, I think a lot of people get really wrapped up in this whole pursuit of the 6-figure business, and now I feel like more and more it's like the 7-figure business. And I mean, like you said earlier, it's great wherever you are, but if you're somebody who aspires to be a 6, or a 7-figure business and you're not there, then like really start to look at what, what is that? Why don't you see yourself in that realm? Because chances are it very well might be that, um, it could be like not I have a 7-figure or I have a 6 or 7-figure business, it's I am taking the steps towards building a 6, 7-figure business. I am someone who looks at my bank accounts daily so that I have a relation towards building a better relationship with my, with my financials. And it's not, it's not that this is what it is as if it's happened. It will happen, but it happens as you work your way through neutral, you know, like you have to get yourself from having that that trigger feeling of discomfort to like, how do you distill it down to the point of like, okay, this is a non-thing, and now I really can step in and believe this.

Yeah, yeah. We need to keep questioning and going to the layer beneath of like, what's the underlying— well, I don't like looking at these. Okay, well, why don't you like looking at this? Well, I feel bad. All right, why do you feel bad? You know, there's always something underneath, and peeling those layers back until we can really get to just neutral, because the numbers are just neutral and the income coming in is neutral and the expenses coming out neutral. But again, it's those stories that we tell ourselves that may not be. And there may be some that we want to keep and that serve us, and there may be some that we need to discard and we need to revisit and see if they're actually serving us in the ways that we want to show up for ourselves, for our business, for our customers and our clients.

Mm-hmm.

Yeah.

And it's just a matter of like, um, self-worth. Right? And it's just like, you are, you are great no matter what your, your bank account says. You're, you're, you're, you're human. You are worthy of everything just as much as the next person and the next person and the next person.

Yeah.

Yeah.

I think what I've seen some people who are, you know, especially maybe the beginning stages of their business get hung up on some of this stuff is maybe when they're transitioning from, they've been at home and maybe been, you know, a full-time caretaker for kids and are now trying to build a business or get back in it. And now they're coming face to face with questions like, well, is this worth it because I have to pay for child care and I'm making less than what it is for child care maybe in the beginning? Or is this worth it for all these other reasons of how it may be affecting our household and division of labor and our rights and responsibilities? So I think it's really good for us to be, like you said, to be just curious and be graceful with ourselves and withholding judgment while we try to figure what the best is fit for us and our families.

Right. And I guess it's really not— I think that we think— so once upon a time, I ran marathons. And I didn't just go out and start— I didn't go out and run 26.2 miles. That's crazy.

I started out— It's crazy, I mean, at any point, if you're talking to me. But that's because I hate running.

No, but it's like, you know, it was like, okay, you had to run a mile, and then you had to run 2 miles, and then like eventually you got to that point. But it's like, it's almost like, you know, in terms of like, you know, your first sale, you might get 200 like nos. I mean, that might sound a little dramatic, but you might get all of those nos. But every single time you get a no, you get one step closer to clarity as to What is it that's your message? What is it, who are the people that resonate with you? And how does it, how does what you're saying land? Because there are customers for everyone. There's like room for all. I mean, yes, it's like, you know, there's competition, but no, there's not because there's only one of you. Right. And you know, and so, you know, what I have to say, which is, you know, this, you know, hard with like numbers, but it's like soft because there's this whole like mindset piece of it. Someone who just wants to talk about numbers are probably like, I don't wanna do that, I don't wanna write my money story, Amy, no thank you. But like, and that's cool, like, you know, whenever, you know, I talk to any prospective clients, my goal is just to get them towards making one more decision closer to clarity. It's not about me closing the sale, it's about helping serve them to get to the next point. And so like, that's what it's really about. It's not about like, oh, I need to get to $100,000. It's what is the one step I can take today that will get me closer to that destination? But it's not a sprint.

It really truly is a marathon. Yeah, and there's ups and downs, and it's a process, and you need to be okay with it and not try to force or wedge yourself into some sort of artificial timeline I should be doing this, I should be at this point, I should be— says who? You know, what's, what's normal? It's a setting on a washing machine. You know, it's not really super helpful for your business journey and what it means for you. So no, I think those are some really great truths. Um, I wanted you to explain a little bit about the accounting stack. This is something that you mentioned in your presentation too, because I think there is sometimes a, uh, you know, a lot of myths and disconnect between what exactly roles can people have who are kind of helping you with your numbers and with your financials? So, um, I'd love to have you clarify that.

So do you want me to talk about like software or like, like the different people on the team?

Yeah, kind of like both. Like, what is it that people tend to bring in their businesses? Who does what? And maybe how does that relate to where you are in your business growth? Because I think it's very different from maybe what people have to do at the beginning, more DIY, to maybe where they grow into. Yeah.

So Yeah, no, this is a great question. So, you know, in terms of like if you're just starting out, the thing that I recommend is finding an accounting software that serves you. And I know that there's a lot of people in the creative community that use Wave. I actually like, I recommend Xero. And the reason why I recommend Xero is because right now you're a baby business, but you have bigger dreams and you aspire to build, to grow into a business. And I think that Xero is the software that will grow with you. Xero, and the reason why I prefer Xero over QuickBooks is because first of all, Xero was designed as like a cloud-based accounting system unlike Intuit with the original QuickBooks Desktop, but it's also very clean. And I think for people in the creative community, it's just very simplistic in design and it's very intuitive. And so what I would recommend is that you invest in an accounting software, and you can even work with someone to get that set up for you, and it wouldn't, I mean, that's like a low-cost investment, and that you learn how to do it, because that's like really healthy money from the get-go. Also, you know, there's different softwares like Xero has a partnership with another company that it acquired that you can digitize all of your receipts, so that you can then turn around, take a picture with your phone, and then have it embedded into the transaction so that if you were to ever be audited, you would be able to provide proof of the receipts of the purchases that you've made so that you keep the IRS happy too. Right. So in terms of stacks of that, and then like, you know, as, as you go on, and in terms of like who you should be partnering with at that point, I think it's always smart for you to work with someone like a bookkeeper just to kind of get you started. I'm not saying hold them on as a retainer because I think there's other ways that you can leverage your, your money from that. But if you have your books set up properly at the get-go, it will help for when you are ready to bring on that person on your team. And then obviously you're going to want to work with a CPA to help you file your taxes. And oftentimes people think an accountant, a CPA is what you need to do all the things. And the thing is, is that that's not true because a bookkeeper is the person that's working in your day-to-day business and can see all of the different nuanced micro things that are happening. A CPA, an accountant, is really looking at your business from a tax lens. And you— and sometimes you may— the bookkeeper and the CPA are looking at different strategies to, to, to help you as a business owner, and they're just providing you information using their level of expertise. And so, and if you were to say, okay, my CPA is going to do my bookkeeping, you're going to pay more because it's—

Frankly, they're overqualified for that. And so you're going to pay a premium for them to be doing that, you know, because you're basically just classifying, categorizing transactions is what most people, bookkeepers are doing.

Yeah. Right. And then you've got someone like, so I do bookkeeping and I also do the CFO stuff. And that's another person who is in your business, but is looking at things from the highest level possible. Okay, you've got all these different things happening and they help you be able to tell the story of your numbers. So, you know, you had $10,000 this month and then last month you had $8,000. Why is that? Oh, that's because this client stepped off and I need to fill that gap. I need to go, I need to make sales this month. And so they're able to help guide you from the very highest level. And sometimes like those two, like I offer bookkeeping services and I offer CFO services. But I also offer just bookkeeping where there's just a, like there's not like really high-level strategy in terms of like, there's like the coaching side of it, but it's more of, you know, here are your books, here are your numbers, that's it. I don't tend to do that as much anymore because people say they want bookkeeping, but what they really want is bookkeeping and strategy. So like that, those two people can, like those positions can live together than CPA. And then the other one that I always talk about is your financial planner, which is the personal side of the business. And the reason— I mean, the personal side of your life, because all of the money, chances are, you know, you're, you're not a corporation that's going to be traded on the stock exchange. You're a business who's just looking to provide a certain type of lifestyle for you and your family. And so what a financial planner will be able to do is help you like leverage. How do you make sure that you've got enough money for retirement? How much money do you really need in order to meet these personal goals that you have for yourself? And they really help kind of, you know, represent you as the person, not as the business owner. They can— and your family. So I like having all of them together. And the other thing that I'm really big on is like the segregation of duties, because all of those players, it takes— that's a different type of perspective. And so to have someone that does all of them, I think you're diluting what each one is masterful at.

Yeah, I think, I think you're asking for someone to wear too many hats and they're probably going to be middling at all of them. So yeah, yeah, versus, you know, okay, this is what I want. Um, and knowing, like you said, that there's a different timeline in terms of like, you know, you— it's good to be checking in with your CPA, but they're not necessarily someone who to be in the day-to-day of your business unless you have larger questions that come up. But, um, yeah, what I tend to see in my experience as well is that people slack on the bookkeeping, and then it comes time for tax time, their books are a mess, they're trying to scramble and get everything ready. Um, and for some things, it's, it's, you know, it's a little too little too late to, to do some things tax-wise that could have been avoided. I see this happen all the time where people have had a really great year or a really great quarter, and they should have switched over to an S Corp and they didn't, and now they, you know, are really overpaying their taxes. Um, and all that can be avoided if we're, we're taking care of more of the maintenance mode of our numbers.

Yeah, yeah, absolutely. Or if they've got some extra money left over, like making extra contributions into retirement. So those sorts of things where—

yeah, which is, which is way better than blowing money on some course that you didn't need for something that you're not even gonna be learning next. Um, that was another one of your mantras that I, that I'd I had a question in my notes to ask you about, which is, tell us your philosophy on buying education and new stuff because we just love to learn so much.

Yes, so I made a— so one of my things is to not buy any course for the sake of buying a course. It is that I only buy courses at the present moment that I'm actually going to utilize them. And so this helps avoid any sort of like, oh, I'll get to that someday, because some someday is never going to happen because then it'll be replaced by the next course. So it's, it's, um, I, I love courses, I love learning, and I have found myself too often caught, caught in that, that, that web. And so I'm very intentional about if I'm investing in a course and I am making the commitment to not only financially invest in it but to also allocate the time in order to deliberately show up and take the course.

Yeah, and I think that's really smart, is to, is to be realistic about that both, and that you need to have time not only just to take the course but to implement it. And if you don't have that right now, then I, I know they're in launch mode and the cart's closing, and we all know how these online businesses work, and some of us do this in our online business, but you got to kind of take some of that emotion and scarcity out of it, because if it's a great course, it's going to be available again. But it needs to make sense time-wise for you. Otherwise, yeah, what you end up is with that giant folder on your computer of courses that have just sat there.

Yeah, in the desk. Yes, no, absolutely. And I think also the other piece of it is, is that when it's like the, the like invest now and you get all these freebies and you're like, oh my God, I gotta do it, and then it's just, it's, it's exciting. But again, if it's not just strategically aligned with what you're doing in your business at the present moment, then it will come around again. And if it doesn't, then it wasn't meant to be, and that's okay. I think that there's so many different courses out there, and there's so many really great teachers out there, that if this particular person is no longer offering it, there's a— chances are there's someone else who's just as qualified to provide you the content area that you need, right?

Yeah, if it's really that important and there's a hole in the marketplace, someone will step in and fill it for you, for sure. Yeah, but if you're not interested and don't have the time to be on Pinterest and do it well, then don't take a Pinterest course, you know? Right, right, right. Just because it's something you know you should be doing, but you know, you need to have— be able to have the time to implement it for sure. So, um, absolutely. Okay, when we talked about kind of not— you, like we said, not driving down our profits just by loading up expenses because we're trying to, you know, not give all that money to Uncle Sam, um, you know, and so I think that's and just kind of revisiting that, that just to be thoughtful and judicious, like you said, when we look at that list of our expenses. And so maybe we, you know, after we go through the calculator and then come up with what the numbers are, what are some other things that may be some kind of questions or probing ways we should be looking at trying to cut some of those expenses and make that easier? What are some things that exercises maybe you take your clients through when you're working on this?

Yeah, so chances are, like, these are the things that are always, like, the highest things I mean, number one, personnel. And that's like such a triggering topic, right? Because you love this person, so you can't possibly think of worlds without them. And it's not to say that you don't, you don't get rid of the position, but you figure out like where is their crossover in rules and like roles and responsibilities, and are the tasks that they're doing really providing a meaningful ROI, and do you need to to make sure that the people that you have on the bus are sitting on the right seats. So it really forces you to examine the, you know, the human capital that you have because that is primarily the biggest, like that's like the first area that you really have to go into. The other area is your like fixed costs. So things like if you're paying rent for an office building or if you're, you know, there's some people who have, that like they have lease payments on their cars and all that. So really taking a look at like, what are these like high-cost ticketed items that are on your, that are monthly recurring expenses on your account that may not be serving you? And is there a way for you to, you know, to end the lease sooner or to find alternative space that's going to provide more for you? And again, you know, When you're just starting out, like a lot of, like particularly in the online businesses, software is like the first place that I usually go to. And I said this earlier, and primarily is because there's a lot of redundancy in those software packages that you're not even aware of. Like I often find that, you know, if you're paying for like a premium subscription to LinkedIn and you're never on LinkedIn, I mean like that becomes like an easy be like, oh yeah, we can get rid of that. And you really start to feel empowered because you're taking control of your finances. Um, and so like we start there and then like we start to just introduce the idea of like, okay, is this person, are you leveraging them to the fullest extent? Um, is there conversations? Because a lot of people in the online space, they may not be working with W-2 employees, but they might have contractors that they're working with. And so how can you turn around and really leverage all of the members of your team. The other piece that I often look at as well is something as simple as like office supplies. So often like someone thinks like, oh, it's innocent, like, oh, I'm just gonna buy this planner 'cause it's $50. I need this one, and oh my gosh, Michael Hyatt just came out with a full focus planner. I gotta go get that one too.

And this was so cute, you know, yeah, you're browsing through Target and you see all all new, new pretty, and now I, I want all gold office supplies. So I, you know, yeah, obviously not talking about personal experience here. Yeah, of being, of being, you know, swept away by the allure of pretty things.

So yeah. And so just being able to say, you know, like, if you're going to Staples, Office Max, or, or you're ordering from Amazon and you see the, like, $10 repeatedly through, like, that's a timeout. That's when you really need to start looking at like, do I need all these things? The other thing is, again, you know, like, I— this is, this is the one that I actually just saw and I'm like, gosh, I gotta get rid of this— is Audible. I have like 7 credits on Audible. I love listening to books because I'm constantly looking at a computer that I just, I feel like I just want to listen. But I, I need to like just schedule time, sit down, and like use up my 7 credits of books and then cancel that for a little while because I'm good with 7 books.

Right. And I know from personal experience, cause it's happened to my husband for multiple years now, is those will just auto renew and give you like your 30 credits or whatever each year. And so you will end up with, oh, well now I could have hundreds of hours of, you know, audio time, but you don't actually have the time to be listening to that much.

Yeah. So exactly. So yeah, just looking at like, just really digging into your numbers And just saying like, and here's the thing, if you can't tell yourself what that thing was for, then chances are you're probably not using it and it's probably not essential to the benefit of your business. And that's just something to be aware of. So maybe it's like, okay, you can't resist going into the office supply section of Target every time you go there. So maybe it's like I go once a month and I buy the stuff that I need for my office supplies if I need any, or I go onto Amazon and I put things in, I mark them as wishlist items, but I don't use them for, I don't make the purchase until it's time to make the purchase, until it's the 10th and I've already done my Profit First transfer so I know I have the money available for it.

Right, and that's the thing. None of this stuff is, is bad in and itself, but like it needs to be in its proper way. And if you're following a good system like Profit First, a cash, you know, management system, and where you've paid yourself, then you have some money and you've already done the things that you needed to do. And so then maybe, you know, you have some flexibility. But if we're not in that place, then, um, yeah, we're just— we're shooting from the hip and we're not, we're not acting with the full picture that maybe we want to and need to have. Absolutely, absolutely, for sure.

Yeah.

So, um, kind of the last thing I wanted to talk about is, um, just about the holding space. Um, this is another quote that I had from you, that if you are holding space with a client who is in the right fit, you are missing out on a chance to fill that space with a client who is. Um, so, and you know, we talked a little bit about kind of that scarcity mindset, but, um, if we find ourselves consistently having the kind of clients in the business that are making, you know, maybe taking too much of our time, or we're having scope creep. That's a really common thing with creative professionals. And, or they're just, you know, we find ourselves we're losing money on the deals. You know, what's a way to kind of dig ourselves out of that situation?

I think that it's really about having, like, before you start having that conversation with the client, really have that conversation with yourself. I mean, you know, what we were talking about earlier about like your money story, there's something that you're feeling that is creating you to take the kind of action that is not in alignment and not within scope. And so being really clear on what that is, is going to be really helpful for you as a, as the business owner to have that conversation. Um, and, So often it's really interesting because I found over like the last year that there were people, like I do this quarterly, so I'm always looking at my client roster and I'm always thinking like, how am I feeling about this? And if I'm feeling even the slightest bit out of alignment, I really try to examine like, why is that? Is it something that they said, did, are not doing? And so to just sit down and examine that and to then go ahead and have the conversation. And here's the thing, they're going to appreciate that because, you know, it could very well be that you picked up on something, that maybe they've just got something going on in that call that you had last month, like just like they weren't in like a good place because their baby's not sleeping through the night. I don't know. But like having those conscious conversations with your clients will really help you facilitate whether or not they are in fact the right fit for you. Right. And if they're not, then how amazing is it that you're gonna be able to like end the client engagement in a really nice calm way? Because chances are if it isn't working for you and you're able to end the arrangement, they're going to refer someone that they know is a better fit for you. Right. Right? And I think that that's often scary because when you're talking about, you know, revenue and money, you're like, okay, this client pays a lot of money for this. How can I possibly not, not want to work with them, right? Just check yourself. If you constantly feel like when you see an email from them and you're like, oh my God, in your stomach, you know, yeah, we all know that feeling, you know, that's not okay. Yeah. And if you want to feel like that, then like go get a 9-to-5 job where you are taking out that freedom to choose. I mean, that's part of the reason why we do this, right? Because we want to build these lifestyles that we're serving people that we want to serve, right? It's a mutual relationship. That's what I always tell my clients too when I'm doing like prospective clients, is that this isn't just about you choosing me, I'm choosing you. Like, we— it has to be a match, otherwise this will not work.

Yeah, and I think it's like, like you said, that's a really good— and a good tip, you know, as you're maybe looking for what are some of these professionals that Amy's talked about that should work and be looking forward to add in your business, is that it should be a mutual match, that it should be someone who maybe understands your industry. You know, I like your tip of, you know, go and look in Facebook groups, ask your friends who are maybe in similar situated businesses. Those are kind of the best referrals that you're going to get. And I see that myself because when people are trying to find a lawyer who understands their creative businesses or whatnot, that's how I get— I get tons of business by people, you know, give me shoutouts on Facebook or they ask. And I think that that's That usually breeds the best match and can kind of start that good conversation dialogue back and forth to what is this relationship going to look like. Do you want someone to hold your feet to the fire or do you want someone to be a gentle encourager and fill that out what's going to work for both of you?

Or a combination of both.

Yes.

Right? One of the things I always say is that if I'm not having hard conversations with you about your money, then I'm not doing my job. If you want me to to turn a blind eye to what you— what I know that you're doing because I can see this in your financials and you want to be in denial over it, then I am not your person. I'm okay with that. Yeah, right, right.

And that's totally fine. Yeah, exactly. So yeah, and I think that like that's— like you said, there's a smart balance of, yeah, and being ready and being, you know, emotionally mature enough, you know, and financially mature enough in your business to understand that that's what you are interested for and that's what what will allow you, you know, and push you to that next level of growth, of being able to really chase the dreams that you want to, to be able to scale, to be able to hire, to be able to branch out new products, new offerings, and whatnot in a way that will, that will be meaningful to you.

So, um, and one more thing I wanted to just add is that because I tend to also get a lot of referrals from like Facebook groups from different industries that I support, and I think oftentimes, and, and like Mike Michalowicz, he has this other book, it's called Surge. He's got a lot of books, but there's a, it's called, it really talks about like niche specialization. And just so that you know, like you could very well be serving a niche, but there are people within that niche that are not a good fit for you. So don't just take the person's like, oh, hire Amy because she's awesome. She might be awesome for that person, but she might not be awesome, or maybe it is a match. So just don't just feel like, oh, they're familiar. It can't just be like, oh, they're familiar with like my industry, and so they know like the different pain points and the opportunities that I have. You know, like they've got to, like you have to mesh with them because you will not, especially with people like for what we do collectively, like if you're going to have to make, if they're gonna be in your business, like I know the financials of what we call—

We see it all behind the curtain. There's no, there are no secrets here, yeah.

And if you don't feel comfortable with that person, forget it. Like, that's okay. Like, it's totally fine if you're not comfortable, but you really need to be comfortable. I mean, not comfortable in terms of like, if you meet someone, you're like, gosh, I can't believe this person really likes this person. It's— this isn't— this doesn't resonate with me. Like, that's good. Like, that's good. That's good information.

Like, examine why you feel that way and then take it to the next call. Exactly. Yeah, no, I think that's really, that's really good. Just finding one of those things shouldn't be dispositive of the other. That should be kind of one in your criteria in terms of, is there industry experience? Okay, now what about, you know, working styles, personality? Is that going to fit? That should be another one, you know. And hopefully you're getting for someone who's really got a full package, who's going to be a good fit for you. So exactly, exactly. And the last thing I wanted to talk about is about, um, having kind of those core capital accounts of like, as we're maybe talking about our businesses growing up, and hopefully if we haven't convinced you by now to, you know, that you need to implement Profit First in your business, you just need to make that happen and make sure that that's a goal that happens in 2020. Um, what should we be looking for in terms of establishing that kind of safety net for our business?

Sure. So in terms of the basic Profit First implementation, and if you're just starting out, this is what I recommend that you do. There's 5 core accounts. There's your income account, so all of your money is— that is the only account that all the money's coming into. So you set that one up, and then you've got an operating expense account, you've got— which is like you're paying all your bills out of there. You've got a tax account, which is a savings account that you're just letting all the money collect. You've got a profit account that, again, another savings account, and you have an owner's pay account— that is a checking— I think it could be either way depending on like what you have going on. Like if your personal banking is with— is also with your business banking, like either way, because you could just do like an online transfer and call it a day. So those are the basic accounts. The other thing I would recommend is that if you do have people that are on payroll, whether they are W-2 or 1099s, that is like the first account that I typically recommend as like be like the basic 5 that you would have. And the reason why is because you want to make sure that you've got that money pulled out of your operating expense account so that you're able to consistently pay your people.

Yeah, yeah, that's one that like you don't want to mess around with. That money needs to be there. Yeah, and make sure that you've paid. And then as you start implementing those, you are getting to a place where you're making sure that you have enough as a buffer in your business and that you're able to kind of work ahead and not behind your numbers, right?

And the other piece of it too is that, you know, like we recommend in like the book, it's like the 10th and the 25th of the month are the two days that you do your Profit First transfers. Now that's standard, um, that doesn't need— that doesn't mean that you need to, to do that. You know, there's some people who do Profit First transfers weekly, there's some people who do their Profit First transfers as it coincides with their payroll. It really varies on the rhythm of your business. But by and large, if you're just starting out, it's the 10th and the 25th, with the understanding that you would have bill payments either on the 15th or 30th of the month so that it's causing more consistency in your, in your business. And so one of the ways that I always try to encourage clients is when they're setting up even payments, not saying, oh, I'm gonna take a payment on like, if If you're going to do, you know, you started with me on the 5th, I'm going to charge you the 5th every month. It's either like you pick the 1st or the 15th of the month so that the money can leave the merchant account and make its way into the bank account prior to the 10th, which is when you're going to run your Profit First transfers, or prior to the 25th when you're going to run your second round of Profit First transfers.

Yeah, that makes sense. Make sure as you're setting up the way that people pay you and what that looks looks like, have it be consistent so that the flow is going to match up. Otherwise, yeah, you can probably get in some bad habits of being like, oh well, I'm low because no, people haven't paid me yet. But you know, that just becomes a giant excuse of not to do what you need to with your money.

Exactly, exactly. Obviously, I mean, that's like a— that holds true for a service-based business. If you're someone who is a product-based business and everything is driven off of like the event of the sale, then, you know, but again, I think that you find the right rhythm that works for you. And if you're working with a Profit First professional, they can really help facilitate what the right rhythm is for you.

Right. And look at, you know, what are your sales, are there peak times, and what makes sense in terms of setting up what this flow of money is going to look like of getting it from the big pot to all of our smaller pots in the right way. That's right. That's right. Awesome. So, well, this has just been so great to hear from you. Did you kind of have any parting wisdom that you wanted to share with us about how we can kind of to get started. You're going to share your calculator and we're going to have that link in the show notes, which I think will be really helpful. But anything else for kind of just getting people excited to implement this, whether they've gotten a chance to read the book or have heard about it or it's been— which is what a lot of people when I mention this on my Instagram, "Oh, that's on my list," or "It's on my nightstand," or "It's on my bookshelf," but they haven't yet dug into it. What's your parting cheerleader moment to try to get them?

On board. Yeah, so it's really easy to implement, and all you would need to do is just— I want you to take time and look at when you will have some free, like a free moment to just do one thing. So it could very well just be calling your bank and saying, I want to set up 5 bank accounts, you know, can you prepare that paperwork in advance for me so that I can just come in and sign it? And, and walk through that. That is the, that is the often the roadblock. I said that earlier is that making that phone call to really facilitate that relationship with the, with your bank is, is, would be the first thing because as soon as that's done for you, then you're off to the races and really are able to do that. And then the next thing is, is that, you know, how would it feel to be able to know that I've got profit, that I have money saved for taxes, that I'm paying myself, that I know that I'm paying myself a certain percentage and that I have a solid relationship with my money that I'm spending it in a very thoughtful and deliberate way. If that, any of that resonates with you, then, you know, taking like the first step, which like I said, bank accounts, or even just reading the first couple chapters of the book is everything. And if you're not someone that wants to read, what I do, again, Audible, and I listen to it at like double speed.

So like quicker time. I'm a 2x or 2. In fact, I think I've gotten in a bad habit that in real life I want people to talk on double speed. A lot of the times I find myself being like, is there some way that we can like speed this conversation up? Podcasts and audiobooks have ruined me.

Yeah. Right, right. For sure. So there's that. And then also like finding yourself like a buddy, like a business buddy who also wants to implement Profit First, that you can give that level of accountability for it. I mean, that's also really going to help. And then the calculator that you're going to have in the show notes will also help facilitate Just playing around with it. So like any of those things or the combination of all of those things will get you towards that implementation because once you've got those accounts set up, it's, it's go time. Like you're good to go. You can actually consistently implement the Profit First strategy.

Awesome. And I promise you that from friends, from, I mean, I could give you a firsthand, you know, first person testimonial and everyone else who I've talked to and clients and friends who have implemented this have all been so glad and said, I am so glad I did Profit First. I wish I would have done earlier and sooner, but oh well, it's done now. And they usually cannot stop evangelizing it to everyone else they know. So when you get that kind of consistent, you know, feedback from something, you know that it's good and that it can work for you too. You're not a special unicorn, not when it comes to your money. And there can be a system and a way to make it work so that, yeah, you you can earn that profit and pay yourself because you're doing some really hard, great, wonderful work and you deserve to be paid for it. 100%. 100%. Well, thanks so much, Amy, for joining us today. I just really appreciate having you on and loved our discussion. Yeah, thanks for having me.

Thanks so much, guys, for joining me on the podcast. I hope you loved that episode. I know it was a little bit on the longer side, but honestly, every, every word was so good that I didn't have the heart to edit any of it So take it for what it is and hopefully may it serve you well. So as a reminder, make sure you check out that profitability calculator that's in the show notes. It's going to be just a simple Excel spreadsheet download. If you don't have Excel, it'll also go into your Google Sheets. So any kind of— it's just, you know, a simple numbers, you know, format file that will make sure that and get you on the right track of putting in your numbers and seeing where you stack back in terms of profitability. So make sure you check out all the links in the show notes. And if you haven't had a chance to leave a review or subscribe to the podcast, make sure you're doing that too. And share with a friend if there's someone that you've been talking about in your, um, in the club of entrepreneurs or friends or someone else in your circle who's been trying to make headway. And, um, you know, you've been seeing them, maybe some of these signals in terms of financial pressure or stress on them. And you know that you, um, you know, maybe make some accountability partners out of each other and say, hey, Hey, let's both do Profit First. Let's work through the book. Let's get these accounts set up. Let's actually do this, actually do this, cross it off our list, because I guarantee that you're going to be so happy when you're on the other side. So shout out to all my people who've implemented Profit First and make sure you're checking with me on Instagram because we're going to have a little live Q&A discussion about this book. And for everyone here who's had a chance to dig in and implement this step, because I know hearing that in person and other people people's experiences and makes it so much easier and motivates us to move forward and to get this stuff done even when it's not the most fun thing in the world. Okay, totally understand, but doesn't mean we don't need to do it, guys. Doesn't change the cold hard facts. So thanks so much for tuning in and giving me some of your time with whatever you've been doing in your busy life. And remember that you are a real entrepreneur, you're a real business owner. So let's own your business in every sense of the word.

Thanks so much.