MBA1561 Dealing With Financial Stress in Your Business

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Hey all, welcome to the $100 MBA show, delivering daily business goodness every single day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teach Omar Zenholm. I'm also the co founder of the $100 MBA, a complete business training and community online. And in today's lesson you will learn how to deal with financial stress in your business. They say stress is a killer, but boy, is financial stress a real murderer. If you're an entrepreneur running your business, financial stress is the worst type of stress because it's like oxygen. Money's like oxygen for your business. Without it, it cannot thrive, it cannot continue. And when oxygen is low, it's natural to stress. It's natural to panic, to worry. And when you're in that state, you don't make the best decisions. So in today's episode, we're going to talk about how to deal with financial stress, how to get a hold of it, how to take control of that feeling and not only get rid of the stress, but prevent it from happening again. Prevent it from creeping up and taking you over. We got a lot to cover in this very important topic, so let's get into it. Let's get down to business. The first thing I want to talk about in today's topic is where does this financial stress come from? And it's actually quite simple. It comes from a lack of visibility. It comes from a lack of understanding the dollars and cents of your business, how much money is going and how much money's coming. Now I get it. As an entrepreneur, many of us, we're not really numbers people. We're creative people. We like to build things. We like to see things come to life. We don't want to be bogged down by all that kind of mumbo jumbo, right? But like I mention, money is the maker and breaker of businesses. It's the lifeline. And no matter how big or small your business is, whether you have a theme park or you have an online business selling services, it takes money to run, it takes money to pay yourself. It takes some money to keep it going and to grow. So my first tip for today's lesson is to make sure you get some visibility. And you can easily do this by having some sort of financial advisor, a CFO of some sort to take a look at your finances. Now you might be thinking, omar, I'm going to spend money now to learn how to lower my stress. Well, this is actually money well spent and you don't have to spend a lot and you don't need a full time CFO. You can hire somebody part time, as low as 300 to 400 to $500 a month. You can even just hire them for one project or one month just to relieve this stress immediately. And what they're going to do is that they're going to look at your ledger, they're going to look at your P and L, which is your profit and loss. They're going to create a profit and loss sheet so they can see, okay, this is all the money you're making from all these different sources. Here's how much you're making regularly, every month. This is the total you made last year or this year. And then they're going to do the same for your expenses. You may have some spreadsheets around, but they're really going to look deep into it and they're going to be able to be able to give you some projections and say, hey, at this rate, you'll be able to grow X amount or you're able to kind of live off your earnings this much, or you need to act fast, you need funding right now or you're not going to make it. They're going to give you a clear understanding of how big your problems are and give you some options on how to relieve your stress. But if you don't know where you stand, you don't know how much of an issue your finances are causing you, you're not going to really know how to solve the problem. So a simple profit loss sheet is going to be able to show you that and also show you, you know, where you're heading now. The other thing that this person can do for you is give you an overview of your expenses and where you're making your money. Why is this important? You're in the weeds, you're building, you're working, you're delivering your service, your product. You don't really see the overview. They can take a look and say, hey, by the way, you're spending most of your money, most of your expenses on are these three things. Is there a way you can negotiate these prices? Is there any way you can lower these expenses somehow? Is there any way we can subsidize finance somehow? Get these down? And they're going to make a huge effect and allow you to relieve some of that stress by having an overview of those expenses. They're going to be able to say, hey, here is where you're getting hurt the most. Let's solve these problems. This is where most of our efforts will make most impact. Same thing with the profit side. They could look at how you're making your money and they say, you know, by the way, you're making most of your money with this product or this service. You may not know this, you may not be exposed to this. You might think, you know, but they kind of might highlight and say, you know, that 40% of the income you make is from this product and this product actually doesn't cost you as much as the other products. So you're actually making more profit. So maybe push this product more because it makes the whole business more profitable. This is really, really useful to have that overview. They can also show you how you can save some money, whether it's signing up for longer term contracts with your service providers or your suppliers, whether it's even currency. A lot of us, we lose a lot of money off currency exchange. You know, we have to maybe pay somebody in US dollars, but we earn in a different currency or vice versa. And maybe purely by just having a currency account in your bank of the same currency of most of your suppliers, you're going to save a whole lot of money. This is a hack that we learned and really helped us. The point here is that you're hiring somebody who's an expert at this to help you in your moment of need. It's like going to the doctor. When you have excruciating pain, they're going to relieve you of the pain. Because they're experts, they know this inside and out, they've seen it all and they're able to look at your business and say, yep, I've seen A business that looks identical to yours. And you can really benefit from these things. 1, 2, 3, 4. And they're going to prescribe, so to speak, some solutions, some relief. Now, if you're starting out and you are feeling financial stress where maybe you're in the first month or two of business, many people think that financial stress comes from not making enough money, but in fact, it's actually coming from the fact you're spending too much. If you can keep your expenses down in the beginning and get in the habit of being really frugal when it comes to your expenses, every time you make more and more money, get more customers, the impact is greater because your expenses are lower. Now, I know that you can't keep your expenses as low as possible at all times. As you grow, you're going to need to scale. That's understandable. But if you're mindful, if you're frugal, if you try to keep those expenses much, much lower than your actual profits, then you're really, really going to have the right mindset and you're going to start out on the right foot. This is a snowball effect. It compounds over time, so make sure you keep that habit. It's the expenses that keep people at night, like paying their employees, paying their suppliers so don't get cut off, paying their rent, all that kind of stuff. It's not, not making the sale. A lot of people think, oh, I can't pay this because I'm not making enough money. No, you're, you can't pay it because you bit off more than you can chew. You grew faster than you should have. You need to kind of make sure you don't grow until you're ready, until you have the funding in place. Once you start growing your business, have the revenue, you have the sales coming in, then you can start, you know, spending a little bit more, but always keep it really low. A simple equation to follow when you're starting out is a two for one equation. For every $2 you make, you spend one. And that way you make sure you're always on the up and up.

Let me tell you about Intuit QuickBooks. When I was starting out my business, I remember sitting at my desk late at night, not working on my business, but cleaning up numbers, tracking and reconciling payments, and wondering how this bec. But once I automated the admin side of things, of my finances, those nights had disappeared and I felt a whole lot better. Outdo it with Intuit QuickBooks. QuickBooks is the trusted end to end solution that businesses rely on for getting paid, managing finances, paying employees, finding new customers, and more. QuickBooks provides a team of AI agents and trusted experts, so doing it yourself no longer means doing it alone. Their payment agent gets you paid faster. Their customer agent finds leads, follows up and secures more more sales. And the accounting agent automates and categorizes transactions. Get your critical business jobs done with QuickBooks on the Intuit platform.

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To wrap up today's lesson on curing financial stress in your business, getting help is really helpful. I know that sounds really cliche, but hey, spending $500 to get somebody who's an expert to give you some financial advice will relieve you of that stress. They're going to tell you, hey, this is your situation. This is what you got to do. And once you have a game plan, you'll start to breathe, okay, I know what I have to do now to solve this problem. This pain, this stress, this anxiety is not going to last forever. Figuring out ways to lower your expenses. Getting tips from that person, that financial expert on how to do that. They're going to look at the weak points of your finances and shore them up and tell you, hey, this is what you got to do to get better on your side. Your job is to go with a two for one ratio, $2 in, $1 out when you're starting out, so you can make sure at the very minimum you're staying afloat. So if you can do $3 in, $1 out, it's even better. If you can do 4:1, that's even better. But if you're ever doing one for one or less than that, you're asking for trouble. Okay? Always be profitable. Thank you so much for listening to the $100 MBA show. I hope today's episode relieved a bit of your stress and gave you a game plan so you can see your way out of this situation. I've been there a few times and this is why I'm telling you I'm giving you, like, the shortcut. The shortcut is get somebody who knows what they're doing. Don't trust your own financial knowledge. You can't be an expert at everything. You focus on the business, Let somebody take a look at your finances, tell you, here are the things you need to do. Implement what they say. And then, hey, once you start making more money, you may want to bring them on retainer or full time and then they can really impact your business in a great way. Thank you so much for listening. Before I go, I want to leave you with this. If you are stressed out, it's going to affect the whole business. It's going to affect your decisions, it's going to affect how you treat everybody in your business. It's going to affect the way you sell, it's going to affect the way you market. You don't want that. So you got to alleviate this situation. You want to be working in a state of comfort, a state of creativity, a state of ease. This is how great products get made. You don't want to make desperate situations because of finances that will buy you in the rear end in the future because you're in that situation. Thank you so much for listening and I'll check you in tomorrow's episode. I'll see you then. Take care.

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