582 - Measuring the health of your business with CPA & fractional CFO, SHANNON WEINSTEIN

Welcome back to the Next Level Life podcast. I'm excited for today's episode. I have brought a beautiful friend on who I met in LA and previously in Arizona from the Dinner series, Shannon Weinstein. Thank you so much for joining me on the podcast today.

Thank you. It was so nice to meet you in person finally.

I know, right? Like, after meeting you, I mean, so many years in the mastermind for so many years, and then just finally see you in person. Like, I know this person.

Yes. I got to see the bottom half of you. Yeah, it was awesome.

Well, I'm excited to have you on the show. Finally, we're going to be talking all things money. Money is one of my favorite conversations to have, and I like to really explore it, to take the taboo out of it, really. Like, so many women that I work with and so many women in business in general have some aversions towards money, and it prevents them from. From really growing. So just to dive in, before we explore your background, I'd love to hear your take on why money is so taboo.

Why is it taboo? Because I think it's because we haven't really learned how to use it as a tool. We've only seen damage it can do if we've only been exposed. So imagine if you had like a hammer or another saw or a screwdriver or anything that you see down on your tool bench. You've only ever seen it used to destroy things or to hurt people. You think that that's a weapon that will be used against them, and you start associating that with negative actions or with destruction or death. That's kind of what happens to people when they associate money. Because money is a tool. Money is neutral. It's who's holding the money and what's the intention for the money. And if you start associating money with those negative things, it's just because you've had negative experiences in the past with it, but it doesn't mean that's an absolute truth about what it's there for. So I think that's a big part of the taboo, just the experience that we've allowed ourselves to have with money and. And how we've seen it used.

My goodness. Best way to start off the podcast, that was absolute fire. And I love that you explored it from that perspective because it's so right. Like, when you actually start to look at it from using it as a tool, it can serve the growth of your business, it can serve the growth of your life, it can allow you to do so many things and give you the freedom on opportunities that you want. But we've got to actually be okay with actually addressing our attachments to money and be okay with actually looking at our numbers for us to actually grow through it. So to dove in, I'd love for you to tell us a little bit about your backgr and what it is that you do and how you help entrepreneurs with their money.

Absolutely. So by my trade and my education, I'm a cpa, which in America is a certified public accountant, which means I'm able to do all sorts of things, from audit a business to do taxes. I'm an expert in accounting and finance. But most of all, my favorite thing is what I actually do for entrepreneurs, which is I serve as a fractional small business cfo. And what I do is I help entrepreneurs turn their data into decisions and actually generate insights from their numbers so that they can actually read the story their numbers are trying to tell them. And I always say that's always a story your numbers are trying to tell you, if you are willing to listen. But you keep changing the damn channel you have to listen to. You have to listen to that AM radio. It's boring. Yeah, it's not as good as Taylor Swift, but it will tell you some good stuff that you need to know. So that's. That's how I phrase. What we do is we try to translate that story for business owners so that they can actually start using money for decision making instead of just reacting to it.

My goodness. Absolute truth right there. And I feel like it's a completely different way of looking at it because I think people have so much negative connotation around money that they're so fearful of actually looking at their numbers and what it's going to tell them about them, when really what it's telling them is actually about the health of their business and where they're going. And I have a similar perspective around business in general. Like, our business is absolutely sharing data with us all the time. And if we're not taking the time to actually look at that data, we can't make educated decisions of where we're going to take things or what's working and what's not working. And I think sometimes we get into our businesses from a labor of love or something that we're really passionate about, and we don't consider it from an actual business perspective. And so I love that it's like really looking at your numbers from a completely different perspective. And so I'd love to know what part of what. What you do that you love the best.

I love it when the reframe happens, when people realize the power that is in the numbers. And as you were saying that, I was thinking of this kind of analogy where it's like what we assign to weight on the scale and we do self worth based on I weigh X, I am fat, therefore I am, I am, I am, I am lazy, I am out of shape, I am this, I am that. And we talk down to ourselves about our own bodies. And then we, we look at the data and sometimes we don't even look at the data. We don't go to the doctor, we don't do the weigh in, we don't look at what things are happening. And then we're surprised when we get sick. And I say, all we're trying to do here for your business's sake is just make sure it doesn't get sick and just make sure we can identify when the temperature starts to rise and you have a fever. What do we do when we have a fever? We take medicine or we go drink more juice or we start getting more rest. That's data. So are you willing to just look at the therm, at the thermostat, or look at the thermometer and say, hmm, that's telling me something about what I should do next. Right. That's all I'm saying is what you should do with your business. So I think that's really the key point is you don't have to become an accountant or become an expert, but you should just know like, hmm, this means I'm gonna get a fever. I should probably go drink some orange juice and I should probably go lay down or I should probably put some. A wet cloth on my forehead. Right. We have these actions that we do based on data. We just do the same thing in business.

Yeah, absolutely. And I feel like there's this element around, like people feel so uncomfortable asking for help. And I was talking to a client about this yesterday and like with all the people that we are connected with and the people that we've met in all the circles that we've been a part of over the years, and I'm sure you would see this as well. Successful entrepreneurs, successful business owners are not scared to ask for help. They're not scared to put their hand up to be like, I don't understand this. Can you tell me what this means? Right. I don't know how to do this. Can you fix this? I don't know how to do this. Can you teach me how? And I was Actually using an analogy around like Richard Branson. And he was like, I've always been the dumbest one in the room. And he's like, there was a time when I was. And I think he said he was like in his 40s or something where he was sitting in a boardroom and someone was talking about their finances and he didn't know the difference between gross and net. And someone took him out of the room and was like, can I just explain to you the difference between gross and net? Because I don't think you really understand this. And he was like, yes, please tell me I don't know what they're talking about. And I think, absolutely right. That willingness to actually go, you know what? I don't get it. I don't expect myself to get it. I'm not going to beat myself up not knowing it. Can I just get some help so then I don't get sick. Like, I just love, love that. And allow yourself to actually be in the, be in the room with people that know. So then you can actually be making an educated decision to move forward.

Yeah, Asking for help is crucial. And I think asking for help, that was a function of your self awareness of what you do not know. And you have to shed the ego that's telling you you should know this. No, you shouldn't. If you haven't asked before, then you shouldn't know it. If you've never sought out the knowledge, then everything that we know is a function of our experience or our knowledge that we've sought out because we've been educated or that we've been conditioned or our parents have told us or someone's told us. But we're not all afforded that luxury of somebody explaining those things to us in a way that we can understand. So there's absolutely nothing wrong with asking for someone to do that for you if you feel like that's something that you need in order to be successful. 100%.

Yeah, I agree with you. I say this all the time with sales as well. It's exactly the same situation. People think they get into business and think that because I'm passionate about what it is that I do that I should know how to sell. And I'm like, if you've never learned sales, if someone has never broken down the process of sales and taught you how to sell effectively, how do you expect yourself to know? Like, you can't just learn from some, you know, Instagram influencer, like what they're doing and try to copy it. No, it's not the way.

No, you can't just like grab a unicycle on the trapeze and be like, I'll try. No, you're not supposed to know that. You're not supposed to know that. If it was that easy, we'd all do it. You're not supposed to know that there's training.

So true. And it's so funny because I was actually. I ran in a little event recently with a group of my masterminders, fresh masterminders. And there was a girl in the room that she actually asked someone about finding an accountant because she was like, I really need someone to help me with my numbers. Because she's like, I know nothing. And I actually, like celebrated her. I was like, this is awesome. Like, it's great that you don't know it. It's great that you're willing to actually find out this information, especially at date. She was like, I think she's like, maybe only a year in. And I'm like, this, you need to know this. Like, if you want to grow your business, you need to know this and you need to be willing to actually learn it. So I just love that opportunity to actually know that. That's that self awareness to know. Okay, now I need to explore this. And I remember someone saying to her in the room, like, make sure you separate straight away. Like, if you're not already doing this, separate your personal from your business expenses. And she was like, oh, really? Like, she was like, open multiple bank accounts. I'm like, yes, open multiple bank accounts. She's like, I didn't know this. I'm like, exactly. You can't do what you. You don't know. So I'd love to even just start there. From your perspective, why do you believe it's really important to start off with, like, literally stop commingling your business and your. And your personal expenses?

Well, there's the, there's the accountant answer that I'll tell you. And then there's the like, Shannon mindset answer, which is more powerful to me. So I'm gonna tell you the. Every accountant will tell you this. It's really important to not commingle because if you. Now we have an authority called the Internal Revenue Service here in America, where they will audit you. And that's a huge pain in the. You know what? So. So what ends up happening is they ask to pull bank statements for the bank account where your business transactions were. Guess what? That's like someone coming in, raiding and raiding your house looking for something. And imagine if you got to Lock up a door right over there in your bedroom. And then you could, like, shove all the other, like, messy stuff in there and be like, they're not going to go through all of that. Oh, like, we'll get them in and out as fast as possible. They're only going to look in the living room. But what this does is this opens up every room of the house because if you're putting business transactions in other bank accounts, they have the ability to go into those and just ask and, and basically question everything. So that sushi lunch that you split where people paid you back, they're going to try to call that income. Every deposit in your bank account, they're going to try to call income and they're probably going to try to double tax you on it because you don't have. If you don't respect the boundaries of your own business, they won't. And that's, that's the key thing is you're establishing the tone that you want to set. Same thing with legal. Legalities again. In the United States, we have these things called LLC is limited liability companies. And I'm sure there's an equivalent in Australia, but there's these entities you set up to legally protect and create a force field around your finances, your assets. And if you open one door and go the other and take things and transact back and forth, you're not respecting the boundary and neither will the law. So if you get sued, you know, if you have a lawsuit brought on you and you say, well, I'm protected because my business and my, my personal assets are completely separated. They go, oh, really? Let's look at your bank account. Are you actually separating them? Are you respecting that boundary or are you just like leaving the fence wide open? You clearly don't really care about your boundary, do you? So that's, that's one thing. That's one aspect of it from an accounting standpoint that we just want you to stay out of trouble. Also, it makes our job a lot easier. Like it makes our job a lot easier when there's one source of data.

So, and the business owner's life a bit easier, like 100%.

It will, it will reduce your, it will reduce your accounting fees significantly if we don't have to comb through multiple bank accounts 100%. But then there's also the mindset aspect of it where I think when you commingle things, you tend to treat the business as a personal bank account. You don't really understand how the business is performing because as long as you still have money in the bank account. You kind of perceive that I'm doing fine. And it doesn't allow you to really measure the business's health by itself. And especially if you run multiple income channels, multiple revenue streams, multiple businesses, and you're coming like stuff in different bank accounts. One business could be just an anchor weighing you down and you wouldn't even know because you, because you see, overall I'm making money, but you may have one business that's making you 10k a month and one that's losing you 8k a month. And you're like, I'm making 2k a month. And I'm like, or you could be making 10 if you just got rid of that one thing weighing you down. You're not really aware of what you could be doing. And there's a bit of a mindset there that it's almost like non commitment. I don't want to create the business because what if it fails? I don't want to separate the finances because, oh well, I don't want to go through all that trouble. What if I don't succeed with it? And I go, well, what if you do and you wish you had done this a lot sooner? I would rather operate under that model of like, what if this is insanely successful and I need to have this in place in order to operate the business of my dreams. Let's go with that. So that's how I think about it.

And it's so important too as well, like if you're wanting to reinvest back in the business or if you're wanting to hire staff or all the other things that we need to do to grow the business, if you're taking a whole bunch of personal money out of it and you're not actually respecting what's really required and not even considering what your own, what your own wage needs to be. Like, maybe it's not even that. Like, I see this happen with a lot of women where they're not paying themselves a wage, they're just taking whatever's left in the bank account, right? And then they don't know then whether they're actually growing how much money they're actually making. And it makes it very hard to then decide, well, can I afford to get a team member? And then they end up working themselves into the ground because they think they can't, but they haven't actually done the, done the numbers to actually go, well, hang on a minute. Every single month I seem to be paying myself around this amount of money. How would I just create a little boundary and set that as my way every single month and make that happen. And I know as we like in our country, like when we set up a company you have to do that, like it's actually a requirement which is so good discipline wise for people to be forced to do that. But before that happens with a certain threshold, once you hit that, you have to change to a company, but before that you don't have to do that. So there's elements around that that people kind of just, it just gets all mixed in and that they rent themselves from actually being able to invest back in their business. And I think it's like, let's just look at the clear information the business is actually sharing with us so we can learn from it, make positive decisions. Otherwise we just get stuck in the same roller coaster. Right. Like you just don't know what's actually happening in your business.

Well, that and you're going with the tides. Like you have no control over where you end up if you just allow yourself to passively go along with, well, whatever happened to my profit this month is what I take out. No, what if I take out this and it's my job to make it, make enough money to support the business and that wage that I want to pay myself. I think that when you operate reactively, you're not going to like where you end up because you're not really hanging onto the wheel, you're just kind of like letting it go and coast wherever it's going to go. And like go with the wind, go with the tide. And like I said, you're not going to like where you go.

Yeah, 100%. I had someone, a client, a past client of mine, reach out to me yesterday and she's like, I want to join the next round of your mastermind. And I'm planning out my finances for the next financial year because it's random here in Australia, like we actually have a financial year end 30 June and then we start a new one. So that's what the cycle that we work on. And so she's like, I'm planning out my next financial year. I want to know how much the mastermind is so that I can put it into my expenses. And I was like, amazing. I love that growth focused activity. Like it's so good you're planning out your goals and where you want to make those investments. So I'd love to explore like your approach when it comes to someone coming to you to really support the growth of their Business. What are some of the things that you look at first before you even start talking about growth?

So I talk about, do you know where you are right now? Because a lot of times people say they want growth, and I from what to what? And they don't even know. They just know they want to grow, they want to scale, because that's what they're supposed to want. So before I, it's really like a health journey where they go, I want to lose weight, I want to get toned, right? My favorite is like, I want to get toned. I'm like, what does that mean? Right? Do I want to build strength? Do I want, like, definition? Like, what do you really want? And when it comes to, and by the way, I worked in Fitness for 10 years, which is why I use all those analogies. But I, I look at it as well, do you know where you are right now? And a lot of people don't even realize they, where they are right now and that they already accomplished their goal. Isn't that crazy that they're like, I just want to quit my job? And I'm like, you can three weeks ago, go do that. Go put your notice in. You're fine. I had that happen before where they just didn't know how to measure progress to those goals. And, and that's the first thing is like, let's get the scorecard on the table and figure out how we're measuring this and almost gamify it to make it more approachable. So it's like you have to kind of keep score and see where you're going. But also I say the power of a good cash flow forecast. I, I basically any client signs on with me, we sit down as soon as we can and we map out the next six weeks of cash coming in and cash going out, which is cash flow, which is not the same as profit. I can explain that if you'd like. But cash going in, cash going out, and we figure out where, what will be your bank account balance in six weeks. I'm not Ms. Cleo or some psychic, but I can tell you this is the, this is where you're going to end up in about six weeks. We can do this. We start with six weeks because you can kind of see it's like one whole month of expenses. And you can start looking up, when does that bill come in? When do I pay my credit card bill every month? What day is this due? When do all my invoices come in, typically? And people pay me, right? Timing all of that and figuring out I can invest in a new hire in this month or in this week or whenever based on when it makes the most sense. And you have the most in the bank account. So you can start planning and mapping those out and plotting them in your plan. And it gives you so much peace of mind, knowing it's all part of the plan. You don't have to wonder, when am I going to do this? Or how am I going to do this? It's all in the plan. You have the plan, and it really helps you set good sales goals, which I know you're passionate about. If you know how much you have to sell in order to accomplish your other goals, it's way easier to accomplish that because you're not aimlessly just selling, saying, I hope I get a sale. You're like, I must sell three of this package by the end of next month, period. Then you go, what will it take to do that? How many leads do I need? How many emails do I have to send out? How many podcasts do I have to go on? How many, how many? Cool. What? And that translates into three clients. Great, I'm gonna go do those things now. You're super focused. So it really kind of starts with having that plan, that future focus plan, and being able to know what your cash flow is going to look like.

100% agree with you. And I feel like one of the other goals I see a lot with women is they. They're like, I just want to be able to replace my old corporate job amount. Right. And that I often see as well, where they're like, they're doing it and they hadn't realized that they're actually doing it and they just haven't really reset goals. Like, do you notice that as well, like, that people just don't set goals that really work towards next key pieces? Like, I feel like one of those things like, like hiring team. A lot of people just keep themselves stuck because they just don't know when is the right time to hire a team. And they haven't actually looked at their numbers to determine the right time. And they just think that they can't afford it based on their numbers, but they're frivolously spending or they're just like taking money out of the, out of the business so much without considering their growth.

Yeah, I think, I think they have goals, but they haven't connected the goals to a measurable data point. So, like, I have this goal. I think that person knows that they want to quit their job, but they don't know what that means in terms of the numbers or how to keep score, that they're winning that game. If you don't keep score, how do you know if you won? So I say you won, you just haven't been keeping score. So you have to say like, my goal is to win the game. Great. What's your score? I don't know. Well then how do you know you won? It goes back to that logic of if you're not looking at your numbers, then you're not allowing yourself to know how far along you are toward your goal. And you might be surprised one way or the other with where you end up. So that's why it's just so important to connect your personal goal to something financial. So I had a client actually that did this. She said, I want to send my daughter to private school. I said, great, how much does that cost? And she said, $20,000 a year. Said, okay, great. We figured out that another 20k a year of take home equated to about 10k a month of revenue. So we said, okay, we need extra 10k a month. She happened to be selling high ticket recurring revenue. And she goes, that's one client. And I was like, do you know how much you're going to love that client if that client represents to you that one client that comes in is like, we got to send like Annie to public or to private school because of you. And that's a really cool thing to, to connect your, the behaviors and your actions every day to your personal goals and say, we did that, we did that. Now we've realized it was only one client. I've had another client where they realized that they had to sell 3 or 4 or 10 of something, but you have that number to operate off of. And then now you can clearly say, if you go to a coach like Christine, or you go to someone else and say, what's your goal? And it's 10 more recurring clients by October. If someone tells you that as their goal, it's like awesome.

Yeah, we can make that instead of.

Like grow scale, you know what I mean? The generic terms, it's like, what does that mean to you? Now you can quantify it. And now you can make it really tangible and specific so you can focus on doing that one thing.

And I think it also takes the fear out of like once you have hired as well. Like, because if you're, yes, you're fearing like, oh my God, I've now got it. Like one of the biggest things I see is that women are like, oh, it's that commitment of, like, I have an employee now. I have to pay their wage every single month. Like, before, it was just me. And so it's easy for me to take a little bit of a pay cut, but I can't do that to a team member. Right. And so even forecasting in that way to consider, like, oh, how many do I need to sell in order to actually cover the wages of my team? So I feel like we're continuing to progress. It changes the way that we look at our business and we're much more proactive in the way that we take action within our business. I think it's. Yeah. Really worthwhile looking at it from that perspective.

Very much so.

So what are your thoughts on or what do you notice with regards to cash flow? Like, what challenges or mistakes that people make that you notice get them in trouble.

So I will circle back to this because I promised I would explain it. The difference between cash flow and profit and people conflating the two. So let me. Let me just explain that profit again for my. Richard Branson's out there. You don't have to know this, okay? Like, you don't have to have known this until now, but you must know this by the end of this episode. Gross revenue is all the money that you bring in, all your deposits, all the things that make your bank account bigger. Okay? Revenue is what you sell. Then you subtract your expenses and you end up with your net profit, which is what you have left over after expenses. Or, you know, also a fancy term, ebitda, if you've heard that EBITDA generally represents profit. We have a fun. We have fun terms in the States for. We like to acronym everything so. So you have your profit. And profit is simply revenue minus expenses equals profit broadly. Well, I like to say that there's the two dimensions of that, right? So you have the two dimensions, like a square of revenue and profit are factors into that. Cash flow is like a cube. It's revenue and expenses and timing. So it's understanding the inflows and outflows. And it's not even just revenue and expenses. It's also paying back loans, getting loans, having the owner capitalize the business by putting their own money in to help support the business. It's also them taking money out as distributions or paying personal expenses with it. It's also, you know, paying off your credit card and all of these other things that you're doing. So it's whatever makes the bank account go up and down and it could be related to anything. From operating your business with revenue expenses through what the owner does with the money themselves that are not business expenses, if that makes sense. So I say that it's basically revenue and expenses over time. And the reason cash flow is so important more than just profit is when you map out the timing of these transactions, you may realize somebody can have. Can I swear on your show, by the way, go for it. Okay, cool. Yeah, it's Ozzy. Come on. I'm from Boston, so I'm like, I special place my heart for you guys. Because I'm just like, yeah, they talk like us. So we have. So basically you can have really solid profit, but shit cash flow, I would say you can always have shit cash flow. And how do you have profit and cash flow when you have to pay your vendors before you get your invoices, when you have to prepay your expenses before the deposits come in and then somebody doesn't pay you and you're like, oh no, I paid all my expenses first and my income second. So what we try to teach people is accelerate the inflows, decelerate the outflows, don't pay off your credit cards early. I know my fellow enneagram threes type A people, I know you want the early pay discount. I know, but like, if something bad happens and you can't make payroll, but American Express or Mastercard or Visa got paid on time, you're going to feel pretty bad. So I always say that you should always prioritize accelerating the inflows and paying your outflows as slow as you can unless your cash flow is super, super healthy and you can afford that time gap.

And I thank you so much for fleshing that out. I think it's so key for everyone to know and I feel like. So one of the things I always say to my clients as well is don't be afraid to actually contact the companies of where your, you know, your expenses are coming from. And if you need to change dates of expenses of when you've got to pay things to really support your cash flow, like, it's one of the best places you can absolutely do that to support that. Because what I see is that when it dips below and it creates this scarcity response, right, we get stuck in this fear and then you're running your business from a place of desperation or fear which does not serve the growth of your business at all. And so if your cash flow is causing that, because that can happen where you're literally like, all the expenses go out and you've got Nothing left in your bank account for two weeks. And then all the money comes in. You feel like flush with cash and then you, like, go and spend it like it's just literally that roller coaster. So, you know, don't be afraid to contact those, you know, go into the website with the subscriptions and change the date and contact the companies that you're working with and change the date if it's going to work best for your cash flow, because you can do that and it actually supports the growth. And they would rather you change the date and pay on time than have to contact them like, oh, sorry, can't pay for another five days. Like, work out what's going to be best for you and your business and support or make those changes so it actually supports your cash flow. Do you agree?

100%. Or if you're going to, hey, I'll pay early, but I need a discount or. Because then you can, you can accelerate the outflow, but a lower magnitude, right? So now you're actually better off, more profitable. So you just have to know your priorities of where you want to be and be able to manage that. That's a great tip too, is like always you can. And you can also negotiate with your clients too, to, hey, we're gonna bill you on the 1st of every month, you know, or whatever it is on the same day of every month. So you get your, your inflows in early and then you, you know, slowly pay out all your outflows. That's what we do. Also, I had this past quarter, I had a scare where I had a really low bank balance because I had hired people. I had invested a lot up front in different things, but I was also in that lull in between getting client payments. I get paid twice a month by my clients. And I was in that, like, second week waiting for that second payment to hit in. Everybody knows how it feels like the day before payday, where you're like, I need that paycheck to hit. That's how I felt. But I also looked at my cash flow forecast that I said, it's part of the plan. I'm going to be, you know, I'm going to have five figures in my bank account tomorrow, and then I'm going to have this and then I'm going to have that. And I said, we're back on track. But I knew how temporary it was because I was empowered by that data. And I think if I had lived in that world of just reacting to my bank account balance, I would have had such a Scarcity mindset. I would have been panicking, but I had no panic because I said, this is temporary. This is one day in between these two points where the bank account's just going to show this and that's okay.

Love that. What are some of the things that your clients say to you once you work all this out for them? What are some of the surprising things that they say or the awarenesses that you create that make them go, my God, this is easier than I thought, or what was I doing before?

Yeah, it's funny because the narrative is just like, oh, my God, this is really. I was way overthinking this and I'm like, yeah, yeah, nine times. If overthinking was a sport, I would be in the Olympics. I completely understand. I've been there. I think that people overthink because they think that they're not qualified to understand this stuff. And I go, actually, I. It's super easy. I mean, you just had Mel Abraham on the show. Mel's my mentor, and he's one of the best people at demystifying all this money stuff into, like, simple habits. And it's so true. And me on the business side, I just say our goal is just to make more than we spend. That's it. That's pretty simple. There's only a couple ways to do that, and that's lower your spending or increase what you make. So, you know, it's a pretty linear plus and minus. It's not some algebraic calculus equation from high school. It's really easy. But the hard part is the discipline, and the hard part is the self awareness. It's again, it's like eating the calorie deficit and workout. It's not that hard. Eat your broccoli, do a burpee. That's how you lose weight. Eat your broccoli, do your burpees. Nobody wants to do that, though. I'm not doing simple. It's. Yeah, no, it's simple, not easy. So money is simple, but it's not easy. But it gets easier the more you go do it because it becomes part of a habit and it becomes second nature. So if someone tells me to go do like 10 push ups, I'm like, ugh, that sucks. Like, the first time you do it, you know, 30, 60, 90 days later, you're like, I can bang that out, no problem. Yeah.

And you get stronger and you feel good about it. Right, right.

It's the reps. It's all in the reps that you put in. And you have to have a Day one, don't be afraid to take the before picture. As I put it, don't be afraid to take the before picture and go, this is day one and we're going to move forward. And I don't expect you to know how to do crazy burpee stuff on day one and compete in the Spartan race. I just expect you to be committed to being one day further in that journey every single day and just be.

Open to the learning of it. I think some people, they take it so personally or they look at it and make it mean something bad about them. But again, if you've not learned it, sometimes you have to remind yourself, if I don't know this, how was I supposed to do anything different? Right? Like you've got to actually allow yourself to educate yourself in order to explore this. And I think the money world, they use so many terms and jargon that just make it so complicated. And you're right, like yourself and Mal, they make it so simple. You make it so simple. That allows us to go, well, actually you're right. It's just plus or minus. Like, what are we doing? Just pay attention.

You have this stuff. You had everything you needed in fourth grade to understand this. It's just they, they gate kept this information from you. Like you had to sign up for the classes. The only difference between you and me is I signed up for the classes. Like I, you know, that's, that's it. I, I wasn't born with this. I mean, my dad taught me when I was very young a lot of stuff about money the way a kid learns it, which is why I explain it like a kid, because that's how I learned it. But fundamentally it's all the same stuff. It's just that, like some of us enrolled in those college classes and some of us didn't. And that's the only difference between me and anybody else that's an entrepreneur. I think they get intimidated by the number conversation. But you know what? Anybody who is in that room that you talked about was like, I don't know what they're talking about. The only reason they know what they're talking about is they had the nerve to ask. They also had to ask at some point and that was the gateway to get them getting there. So just understand that you're not behind. You just haven't asked the question yet.

100%. I always say to my clients, I always tell the story around when I first started my business. And I come from like a business development background. Like I understand the numbers, like I understand all this. I still had some fear of money mindset stuff around it as well. I had all the conditioning around being in school and not doing really well at math and all of that type of story. And I remember, like, saying, too. And I say this to my groups as I take them through when we start exploring money every single time. Like, I remember sitting with my accountant that first time and feeling so scared and so fearful because I did not know the tax system. I did not know all the ins and outs because I'd never run a business before. And so I remember sitting with her and being like, I want you to tell me absolutely everything. Like, I am a complete layman. Like, I know nothing. Like, I want you to treat me like I know absolutely nothing and explain every single part of what you're doing so I know exactly how to take care of my money. And she was like, oh, really? Okay. Like, she was so excited, actually.

That makes us happy, right? Like, so happy. We're so happy. It's like. It's like. It's like asking the chef, explain to me how you made this, or a painter, show me how you did this. And they're like, they're so proud of it. Because you want to know how I did my work of art here.

Yeah.

That's amazing. You don't just want to buy my art. You want to hear the story of. Of how I did this. Like, we're all always happy for that. Yeah. And they want to.

You want to help. Like, it's not like you sitting there trying to keep Gatekeep. Right. Like, yeah. And so I think, like, going into that relationship with my accountant, I was, like, so open to learning that. It also allowed her to actually continue to share. So she didn't ever feel like she was saying stuff that she's like, oh, you should already know this. Like, it just gave her permission to be like, I'm just going to tell you how it is and give you all the information and you can make a decision from that. So I think having a relationship with your accountant, like, that is really key and just not being afraid to ask for help at all. So let's talk a little bit more about, like, growth. So when you start to have businesses come to you and, like, yes, having clear goals and working towards what's really important to you, but when you think about, like, growing and scaling a business, what are some of the mistakes that you see businesses make that prevent them from growing when it comes to their money?

I think it's. It's. Well, first of all, I think people say they want to grow, but they don't really. And I think they don't understand what comes along with growing and scaling. And they don't a. They don't know the difference between those two things, but they want to grow, but they don't want to complicate things. So, yes, you can grow, but understand that with growth. And Alex Hormozy, who I follow diligently, has this kind of philosophy that I love where he says, he talks about a cleaning business and he says they wanted to grow the cleaning business. And they said their constraint was that, you know, they couldn't get. The issue really was that they were getting a lot of clients coming in they couldn't fulfill because there weren't enough cleaning staff to service all the houses that wanted to use their services. Right. They have a supply problem, not a demand problem. So he says you're actually not in the cleaning business. You're in the recruiting business because you're going to spend your entirety of your business recruiting talent because you're going to have churn, you're going to turnover, and you're going to have to re recruit. So you have to become exceptionally good at recruiting employees and supporting them because that's the. That's what your business is built on. You know, you're never going to have no houses to clean in this neighborhood that they were in. Like, the word of mouth is going to spread. You have no problem with marketing, no problem with that. Just you need to be able to fulfill. So your job is now expert recruiter. And they realize, I don't really want to be in a recruiting business. I just wanted to kind of make money and to grow, though, you have to understand that you're actually not in the business that you think you are. It's like, are you in the sales business technically, are you in the marketing business? Are you in the recruiting business like that guy? So where are you spending all of your time? And where should you be spending all of your time if you do want to grow? And are you committed to actually following through on that? Too many people are technicians who love. You know, if you read the E. Myth by Michael Gerber, they talk about a baker, a woman who was a baker, and she loved baking pies and cookies and cakes. So she decided to open a bakery. And the one thing she basically never did again was bake. Yeah. Because she was too busy doing the orders and the inventory and the ingredients and the quality checks and the machine fixing and all the other stuff that goes on at a bakery. And it's like your job is bakery owner, your job is not baker. And that's a very different job description. So I think that most people want to grow, but that you have to understand what commitment comes along with that and who you need to become as the new owner of that business. And it's okay not to grow. It's okay. If you have a very solid, profitable business that cash flows for you and you're accomplishing your goal, that is okay. As you talked about with Mel probably about the money machine, if you have a solid flow into your money machine, that is great. And you don't have to want for anything more. You don't have to. But if you do, you just have to understand what comes along with that.

Yeah, you're so right. And I see this as well with people who go to that next phase and they want to hire a team, but they're like, oh, I don't actually want to manage. Like, I don't want to be a leader. And it's so interesting. And it's like, you're right. Like with that stage you actually do. Your role is going to change and you need to be conscious of that and be aware of what that's going to look like and also recognize that you're going to have to be a really good leader to support the growth of the business. So you're supporting your team and a lot of people just don't want to do that, whether that's been from past experiences or lack of education. Because I just don't know how to be a good leader. I think I have fear around it. But you're right, like, it's like you need to explore what that actually looks like and even just finding other businesses that are similar and look at their different growth structures and actually go, well, what's actually going to work well for me because like, I've got a client that she recognized that she didn't want to be a leader, but she wanted to grow. She really did want to grow the business and she knew that that would mean that she would have to really hire a team. And so she was like, well, I actually need to get a high level leader in that actually supports my team, that we work closely together. But she wanted to really still work with clients. It just like lit her up. And she was so inspired by working with her clients that she was like, I still want to have, you know, two or three days where I'm working on the business within. Sorry, on with the clients. And then other times that I'm working on the business, and then I just will have a leader that comes in and supports that. And I was like, amazing. Like, you can absolutely create that just because of your role still needs to change slightly because, you know, it's your business, and that leader is still going to need leadership from you. So it's like, you can't just delegate. And I think that's one of the other things when it comes to money. A lot of people just go, oh, I don't know it. I don't want to learn it. You deal with it. And they just literally hand off all their money. I'd love to hear your thoughts on that. Like, certain expansive part of the business where you think that's okay, or where you're like, no, no, I'll be across it every single time.

Yeah, it's one of those things where you can outsource, you can hire people. And I've had plenty of bad hires in my. My business's lifetime, so I can speak to this from experience. And I'm kind of talking to myself two, three years ago and saying, okay, they're supposed to be experts. Yes. But, you know, if you hire. If you run a restaurant and you hire a cook, they better damn well know how to use a frying pan and an oven and a stove. Right? But they don't know your recipes. You're still responsible for setting the tone of culture and giving them the SOPs, giving them the recipes that they have to follow and outlining your expectations of them, because the expectations they carry in with them are only as good as the expectations their former boss had for them. And you have no idea who the hell that is. So it's kind of like dating, where you say, I really have to set the tone for this relationship. I don't want to borrow the rules that you had in your prior relationship and bring them over here. That sounds terrible. It's. We have to establish that we have this relationship now, and this is. These are the ground rules. Right. And these are the expectations we have of each other. And no, that is not sexy talk. I know that. But when you bring somebody in as an employee, this is what you have to talk through, is, here are the expectations of the job role, and here is. And you have good interview questions, right? It's like, what would make you quit a job and vice versa. I'm gonna tell you what would make me fire somebody. And I think that conversation has to happen of, like, what would make you leave? And that putting that out in the open is Great. But when we talk about leadership and we talk about money and we talk about spending money on people, I say they don't always come, batteries included guys, depending on what you're, you know, unless you're spending top dollar for decade long experienced people, you can't, you can't hire a VA overseas and they don't come preloaded with batteries. I jokingly say that and say they're going to need a lot more hands on guidance. They're going to need a lot more puppeteering from you in the short term, especially until they get to know your business. So you're not really going to buy back a lot of your time. You're going to be spending your time training them, hopefully for a return on that time later. But the best thing you can do is just really establish that cash flow and then hire the top talent that really can run with vague instructions because they can help you craft the policies and procedures too along the way and they know how to do that. So I'm kind of an advocate for investing in top talent where it really matters. Anybody that's customer facing or a core part of your product and then outsourcing at first, some of the more ancillary operational roles like admins and bookkeepers and stuff like that.

Yeah. Awesome, awesome. I'd love to know your, your take on like as we start to expand because we talked about like growing and having those go goals and like talking about cash flow, is there anything else that we need to be conscious of when it comes to growing? Now I know that we, you know, there's a difference between growing just to keep the business and growing to actually sell the business. So I'd love to hear your take on the core things that you would look at. If someone's wanting to just continue to grow and keep making money, is there anything else other than cash flow we need to be conscious of? And secondly, when it comes to actually growing to sell.

So I love this because this is a. Now I'm borrowing this analogy from Alex Hormozy, but it was a perfect analogy. And I had this thought already, but I can't claim it because he did such a good job of explaining it. So, okay, if you're thinking about, I'm thinking about selling my business. Right. Or you might be thinking, I just want to scale my business, but I don't want to sell it because I want to grow it and I want to have this business forever. It's my baby, it's my passion, whatever. If you're in either of these Two camps, which is probably most of your listeners. Then here's what I would tell you. Picture yourself. You're in a house, right? You live in a house and you decided you're going to sell your house. Okay, what do you do to prepare the house to be sold? You fix it up. You repair all the things, you paint all the little scratches, you redecorate, you minimize things, you declutter and you clean it all up and it smells beautiful for all the visitors that are going to come in and look at it. And then what do you think to yourself? It's actually a nice house. It's actually a really nice house. I think I, maybe we should just stay here. I think I just didn't like all the clutter and all the stuff and all the association I had and the stress of it, like this is actually really nice. Maybe we should stay. You know, you always have that. Eventually you sell your house, but you always have that little bit of like house looks real nice. Kind of a shame we're getting rid of it. You know, you have that moment. No matter if you're going to sell the house or you're going to stay in it long term, you do the same things to it. You make it sellable and you make it something people want to keep. Because a business worth selling is one worth hanging onto. Because it's cash flowing, it's high value, it's high reliability. So that's the biggest thing is just operating. You could be operating under either of those two goals. You have the exact same homework assignment. Make it look like a sellable business.

Love it. And so then when it comes to, like, I know that you love talking about this, you know, building to actually sell and the key things that come into play with that, what are some of those things that we need to be conscious of? Because I know that some people have no clue when it comes to those considerations like what are we fixing up? What do we need to look at?

Yeah, well, for one, you have to have stable revenue and cash flow. Monthly recurring revenue is great. You just want to show that you're reliable, that your business is reliable and structured and stable. Where if the owner walks away as well for two or three weeks, it doesn't suffer greatly. So there's a sales machine running, there's a, an operations machine running and fulfillment running where it's basically hands off. Or you could really install any human being with, you know, any warm blooded human can come in and push the buttons and understand how it works and they could install themselves as The CEO or the operator of the machine. So if the machines are all working well, then it doesn't matter who's pushing the buttons as long as the process is there. So having good sops is key. It's really about having strong financials, which means a high profit margin and high cash flow. But also it's about reducing risk. Reducing risk that you're over reliant on certain customers, over reliant on certain channels of income, over reliant on your founder to go out and sell every little customer. The fact that you're starting from zero every single month. If you have to make 30 sales a month just to get by and then you want to take a month off, guess what? No sales. And that's gonna suck. So it's more about the monthly recurring revenue and establishing yourself as, hey, this is a machine that is making me money. And I'm just tinkering with the machine, putting the cogs in place. And it can run with or without me, preferably with me right now, because we all have ego and we think, oh, it can't run without me. I love running my business and I love building it. I'm still on the build, you know, but when that thing is truly a machine, it can be transferable, and that's when it's really valuable.

Oh, so good. I'm so glad that you shared that and so many things I want to take away from that. I recently had a conversation with my coach a little while ago, about a month ago, and we were talking about scaling my business and where I want to take it. And one of the things that really came up for me was that similar in a way that I was like, okay, so what do I love about what it is that I do within my business and what are my roles and what am I, what am I actually responsible for within the business? And then what am I team responsible for? And like, can I take breaks? And actually all of that, Like, I am able to do that, which is amazing. I love my business and all the reoccurring revenue that I have. But then there was elements of like, well, actually for me to scale, I can't keep doing more and more of what it is that I do, otherwise I'll burn out. Right? I can't keep coaching all the time. I'll absolutely burn out. And so there was this element around it of like, oh, there's this, this one part that I absolutely love doing that I want to keep doing, but I can't do it at scale. So she was like, you're going to have to hire someone to actually come in a place and do this. And I was like, but yeah, but I'm really good at that.

And she was like, train them.

Yeah, exactly. She's like, that's the thing. She's like, find someone that would be amazing and is invested and then train them your way so that actually do it your way. But one of the things that she said to me that was similar to what you were just saying is like, stop looking at it like you're the one also having to deliver it all and focus back on your customer and focus back on the business as a separate entity and go, well, what does it need in order to thrive? And I was like, that's a whole different way of looking at it, right? Because I was like, oh, the business really does need another team member in this space to do this role because it cannot thrive without that. And so rather than going, oh, but that's what I'm really good at, I can look at it from the perspective of that's actually really going to serve my clients in such a massive way because then I can stay with really high level clients and actually support them in a way that supports them beyond what anyone else can do within the business. But it's also, I'm not the only one doing that. Right. And I think that that's one of the things. It's that ego shift of like, I had to like, put that aside to be conscious of, like, okay, so how can I continue to actually serve the growth of the business, serve my clients in a really massive way, but actually not have to do it all myself? And I think sometimes we can get caught up in. Because I was like, I know I need to hire, but I'm really not sure what I, who or what I need to hire. So it was a really good way of thinking about that. That. So get your house. I love that.

Yeah. And the language you use too, Christine, like circling back to like one of your first questions was, why do we separate all this stuff and why do we separate personal business? I said, because you want to have the mindset and start talking about the business like it's a different person. Because you say I need this when you refer to the business as I, you're just really adding to that impression that this is all ego driven. That like the business is you. No, it's not. The business is the business. And the business right now needs, needs this. And you can isolate I need from the versus what the business needs and when you can really do that and you start using that language. I feel like that is super empowering.

I totally agree with you. Love it. Oh, my goodness. So many amazing things. Thank you so much for sharing all of this wisdom with us today. I'd love to know what's. What's one thing that you just wish people knew about their money and their numbers in their business, it's not that scary.

I would say that most of the time, if you have any fear around money, I want you to think of it as this noise under the bed. Right. That we always say it's the monster under the bed. It's only a monster because you haven't looked down and realized it's just a mouse.

Yeah.

But it will always be a monster in your head until you look at it and you realize what it is. So the first step is just looking at it and disarming the whole story. Because once you look at it, you're going to go, I stress myself out for years and just for this, this is nuts. And then you're going to feel invalidated for how you felt. So, you know, I was, I was stressed out and I was losing sleep over this little thing. Only because you wouldn't look at it. So I would say just start becoming self aware and looking at your numbers. It's going to be super empowering for you.

100% agree with you. Thank you so much. Can you share with my listeners where they can learn from you, where they can find you?

Yeah, if you like my style of teaching, talking and talking about this stuff, you can find me at Keep what you earn. That's my podcast and everything. Keep what you earn. Keep what you earn.com to learn more about our services. Now we serve exclusively USA based clients, but anyone can learn from my podcast. It's pretty much, you know, conceptual and principles based and you can take a lot away from it.

Amazing. Thank you so much for sharing all your wisdom with us today, Shannon. It's been an absolute joy.

Thank you.