15 Feb 204 | The Secrets to Understanding Your Books with Bookkeeper Danielle Hayden
Welcome to episode 204 of Profit Boss® Radio! It goes without saying that most small business owners don’t love their numbers. To make matters worse, they often struggle to decode exactly what their numbers are telling them. This disconnect can make it hard to know what should be on your calendar next week, next month, and next quarter to drive more profits!
In this classic episode from the Profit Boss® Radio archives, I’m joined by Danielle Hayden. She’s the CEO and Founder of Kickstart Accounting and host of the Entrepreneur Money Stories Podcast. After 10 years working as a CFO, she realized that her passion was to help women entrepreneurs do something unexpected. Now, she’s laser-focused on guiding them to understand their finances to grow their businesses and become more profitable.
In this conversation, Danielle and I discuss how business owners can make sense of their books to grow smarter, not harder. You’ll learn why entrepreneurs need more than a bookkeeper to create the sustainable wealth they deserve–and how to get the financial analysis and education you need to build a business and live life on your terms.
If you’re ready to take a deep dive into your finances and make sense of your books once and for all, today’s episode is for you!
Here’s what you’ll find out in this week’s episode of Profit Boss® Radio:
- Secrets to effective money management for service based AND product based businesses.
- The reason why women constantly struggle to pay themselves from their businesses.
- The important connection between understanding your financial numbers and achieving profitable growth.
- How to evaluate financial underperformance and determine if it’s time to reevaluate a business model.
- Why you should not be emotionally attached to an unsuccessful business and how doing so can be financially devastating.
- The PGAs (formerly known as KPIs) I use to understand where to focus my energy and make sure my online service business is growing.
- What business owners should be paying themselves, and how payouts should work.
- Why you should have custom tools to measure the financial health of your business.
The Money Blueprint℠ for Business Owners
The Money Blueprint℠ is profit coaching that puts you in control of your business finances for good. No more Head-in-the-Sand Syndrome. No more fear, stress, or shame. Simply total confidence. Learn more here!
Resources and Related Profit Boss® Content
- Kickstart Accounting
- Entrepreneur Money Stories Podcast
- The Profit Planner book series
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Hilary Hendershott: Today, I’m excited to share with you a timeless episode from the Profit Boss Radio Archives, one of the most interesting conversations I can recall ever having about bookkeeping. I think it goes without saying that most small business owners do not love their numbers, let alone know how to decode the story that their numbers are telling them. So, if that sounds like you, you’re in the right place. In today’s interview with Danielle Hayden, CEO of Kickstart Accounting and host of the Entrepreneur Money Stories Podcast, she and I are talking about how to create your own secret decoder ring for your numbers, that filter that’s going to help you and your team sort and report so that your numbers inform what goes on your calendar or comes off next week, next month, and next quarter to drive more profits. Full transparency, I have to apologize about the quality of my audio track. Danielle sounds great but I didn’t get the technology from my site configured correctly.
Here’s a bit about Danielle. As a Chief Financial Officer for over 10 years, Danielle loved accounting but she felt that something was missing. That’s when she realized her thrill for helping entrepreneurs, especially women, who were breaking the rules of business in order to create something amazing, something the rest of the world didn’t expect them to do. Danielle left corporate accounting and formed Kickstart Accounting, an accounting firm designed to help female entrepreneurs understand their financials in order to grow their businesses and become more profitable. This lady and I are super aligned. Since then, she has realized entrepreneurs need more than just a bookkeeper. They need real financial analysis and education in order to get the confidence required to create a sustainable wealth they deserve. When Danielle isn’t knee-deep in numbers, you can find her hanging with her two kids or competing in the nearest Spartan race. We’ll have to ask her about that. Actually, let’s just do that. Danielle, tell us about Spartan races.
Danielle Hayden: I’m so glad you asked. This is next to numbers, my favorite next topic. The Spartan Race is an obstacle mud run where you can do a short of three miles and as long as 30 plus miles through obstacles, and mud. Super fun.
Hilary Hendershott: Oh, my goodness. How many miles do you do?
Danielle Hayden: My favorite is The Beast, and it’s 13 miles and about 25 obstacles.
Hilary Hendershott: How do you train for this?
Danielle Hayden: Lots of running. I’m a big fan of – I have a Peloton bike and lots of lifting weights, and we have a pull-up bar in our workout room here and we all have competitions
Hilary Hendershott: There in the office?
Danielle Hayden: Yeah. Over here in my office.
Hilary Hendershott: That’s quite a company culture you have. And so, here’s the real question. After the race, how long does it take you to get the mud off of you?
Danielle Hayden: You know, we’ve gotten pretty good at actually preparing. So, a lot of times, we’ll travel for these races and we’ve gotten a lot better at learning what to bring with us. And so, usually by two hair washes, I’m pretty good. Those first few races, we were amateurs and it took a while to get mud out.
Hilary Hendershott: Okay. More power to you. I’m impressed. And now I want to take a second for you, profit boss, and I just want to read to you a little bit of language from Danielle’s website because her bio is good. You’re in financial services, you have to give people your credibility, and that’s all fine and well. But listen to this, “Imagine for a second a world with no more accounting overwhelm, no more hiding in the dark from your financials, no more running from your family and mentors when they ask you questions about your numbers, add to that your financial advisor, finally getting to take home the paycheck you deserve.” I read this and I thought Danielle and I are cut from the same cloth because I find myself I sometimes say I’m the Joan of Arc for women actually paying themselves from their business, and I have a feeling that Danielle maybe has some of the same sentiments. Danielle, I find that women the biggest thing I have to argue for is, “Pay yourself from your business,” like pay and save.
Danielle Hayden: Yes. Amen. Pay yourself and save. Yes.
Hilary Hendershott: So, let’s talk about, in investing, we can divide all investment methodologies into either active or passive investments. Now, in accounting, you only have one, well, there’s different types of accounting but before I hit record, we talked about dividing, categorizing the different business types so that people can learn to think from the right framework or system for their business. I remember when I started in business and there were business coaches who kept foisting on me these questions like, “What are your financial KPIs?” There were questions that I ultimately realized and learned didn’t even apply to my business. And so, I want to help people get out of that confusion and overwhelm. And so, we talked about three different product categories. Do you mind saying what those product categories are?
Danielle Hayden: Yes. So, we have three categories of product businesses and then businesses who have a brick and mortar. So, you have a storefront and you may be providing services within that storefront or products within that storefront. And then the third would be online service-based businesses.
Hilary Hendershott: Okay. Great. I’m just taking notes here so if you can hear me typing a lot but I want to remember to go back and ask you about these things. Let’s start with product. For whatever reason, I see a lot of women starting product businesses now, and that product businesses, they’re special. They have the potential to make people really rich but they’re also really hard. So, what do you want a product business owner to be looking out for from a financial perspective? How do you want her to design her business and what are the key elements that are specific to her business?
Danielle Hayden: So, somebody who is selling a product needs to really be looking at their inventory and spending a lot of time on their inventory management and their profitability by product. I’m going to hone in on the profitability by product because we have a lot of clients who sell several different products. And they might have one product. They actually only make a little bit on it. You know, maybe they only make about 10%, 15% margin on that product but they are able to attract a lot of people in their door or onto their website by offering that lower margin product. But then they have a higher-margin product and they know that once people start with that lower-margin product, they’re going to come back for more and they’re going to eventually purchase that higher-margin product. But it’s really important to know and understand all of your products, right? So, if somebody doesn’t know how much they’re making by product and how much they’re selling by product, it would be really difficult for them to understand that story and how to make business decisions based on that information. Does that make sense?
Hilary Hendershott: It does. Let’s back up just a little bit in the timeline. For example, there’s a woman in my coaching program this year who is launching a product business. So, she concepted this product. It’s currently in design. And so, what would you want her to be thinking about in terms of, I know distribution is really key, how should she price the product relative to cost? What would be your advice there?
Danielle Hayden: I would advise her, first and foremost, to start looking at where she will be purchasing her product and then how that will be shipping to her customers. So, does she need to buy the inventory and how is her inventory and then ship her own inventory? Does it make sense for her to be able to have somebody who manufactures her products for her and then ship it on her behalf or find somebody who can provide her with a drop shipping option?
Hilary Hendershott: So, it’s obviously best if you don’t have to store and ship your own inventory. I would imagine that the top of the line or the platinum level would be they don’t make it until the customer pays for it, right?
Danielle Hayden: Absolutely. But keep in mind, you’re probably going to pay more for that. So, you also want to think about how much money. So, if you’re going to charge $20 per product and it is going to cost her $15 per product in order for her to have it drop-shipped versus maybe only $10 per product in cost in order for her to actually hold the inventory and then be able to ship it on her own behalf. So, it’s $5 per product that she’s saving and that…
Hilary Hendershott: That’s 25%.
Danielle Hayden: Right. And that’s very just storing numbers at the wall. The savings could be even greater when you are actually purchasing your own inventory. But again, you have to know depending on what the product is, how many do you need to purchase, of what colors need to be purchased, or if you’re going to have more than one product, how many of each need to be purchased? But if you’re starting with one product and one color, it may make sense if you have the funding available to be able to purchase that inventory and ship it out on your own as a starting point until you ramp up the volume to be able to afford a lower margin and drop shipping.
Hilary Hendershott: So, take that savings and sort of reinvest it in marketing and product manufacturing until you deepen the breadth of the product line.
Danielle Hayden: Absolutely, yes.
Hilary Hendershott: What are some of the businesses you work with that are product businesses that you think of as the most sweet? Like, they’ve got it, they’ve got distribution going. They’ve got the product is right. They know their market. How are they distributing? Is it Amazon? Is it their own website? I’m not asking you to name names but just as an example so people have something to think from.
Danielle Hayden: Yeah. So, we have an online store who actually her biggest passion is golfing, and this client loves to golf. And so, she started an online store using Shopify and she is drop shipping all of her golf accessories to her clients. So, she uses Shopify and it’s an online store, and she is now using drop shipping. She is one of my clients who originally when she first started, she actually was purchasing her inventory, storing it in her basement, and her and her two teammates were shipping it out. And as she was able to reinvest in the business, she was finally able to find a manufacturer and afford the lower profitability in order to be able to drop ship that inventory.
Hilary Hendershott: So, she did a couple of years of daily trips to the UPS store?
Danielle Hayden: Yes. You know what, we have so much technology right now. You can use Stamps.com and so you really don’t need to leave your home. You can buy the necessary equipment and printer and shipping materials to be able to do it right from your house.
Hilary Hendershott: So, she didn’t have to put them in her Toyota Tercel and drive there.
Danielle Hayden: No, she didn’t.
Hilary Hendershott: Okay. Good. So, she probably has a diversification of products, right? Multiple product lines. She’s probably got a personality brand. I’m just guessing. I’m trying to give people a framework to think from of what’s most magnetic right now.
Danielle Hayden: Yeah. To me, it’s get started, right? So, I think that’s number one. So, she did start with a few products and then built from there. And so, as she learned what her clients loved and what was selling really well, she was able to bring on more products that were similar to that and refine her product and inventory line as she learned more and more about her ideal client.
Hilary Hendershott: Okay. And have you ever given someone the advice to shut down a product business?
Danielle Hayden: Absolutely. Not just the product business but maybe a product line within their product business or consider different avenues in how they’re delivering their product.
Hilary Hendershott: And what kind of performance, obviously, would be negative performance but how consistent or how long would it have to be underperforming for you to make that recommendation?
Danielle Hayden: It depends on everyone’s personal situation, and I hate saying that. But if you are somebody who has gone over a year without taking a paycheck from your business, if you’re losing money, if you’re having to invest in money month over month, those are definitely red flags to be able to make that determination. Really, the goal of my accounting firm, when we deliver our financials to clients, we do that on a monthly basis and give them their key metrics so that they can make these business decisions before they ever get to the point where they need to close their operations, right? So, they’re getting a monthly report saying, “Hey, you’re spending too much money here. You’re taking a loss. What are our goals for this year and what do we need to look at to change in order for them to succeed and not have to get to the point where they’re closing down?
Hilary Hendershott: Right. I have in the past met some people who get, in my opinion, emotionally attached to the business. They have a soft spot in their heart for the products. They’re like evangelists for the product but nobody’s buying it or they just can’t get distribution. There are lots of products that go to pasture and die, unfortunately, because you can’t get them to people for whatever reason. And so, I just…
Danielle Hayden: Or you can’t find your market or you don’t have the right marketing in order to be able to find your ideal client and be able to serve them. And you’re right, the emotional piece, we see it with clients time and time again. They’ve invested so much that they’re afraid to cut the tie because they’ve already invested so much.
Hilary Hendershott: Yeah. So, you present to them the literature about the sunk cost fallacy?
Danielle Hayden: Yes, absolutely.
Hilary Hendershott: You have to walk away. Okay. Anything else about product businesses that you want to mention before I move on to brick and mortar?
Danielle Hayden: No. Just concentrate on profitability by product.
Hilary Hendershott: Okay. Very good.
Danielle Hayden: I need to say that.
Hilary Hendershott: #Profitability by product.
Danielle Hayden: Yes.
Hilary Hendershott: Okay. Brick and mortar businesses with a storefront, either services or products. So, it’s interesting that you want services and products in there. I guess a brick-and-mortar with a service could be, I mean, could I be a brick and mortar if I had a store in a foot mall, strip mall?
Danielle Hayden: Yes, you could. Yeah, if you had a consulting business where people could come into your office. A few different people you can think of, your local CPA who might have an office down the street who just wants you to come in to file their return. A hair salon would be another example. They’re providing a service. Even some gyms, you’re offering maybe personal training or group fitness classes, yoga studios, Pilates where you’re not selling a product. You’re selling a class or a service.
Hilary Hendershott: And so, every type of the business you’ve mentioned so far, CPA, hair salon, or in a gym have some kind of recurring revenue or subscription revenue. Is that correct?
Danielle Hayden: Actually, most likely not. So, a CPA, you’re actually going to pay by tax returns so clients are turning…
Hilary Hendershott: Clients are sticky. So, you don’t consider that recurring revenue, huh?
Danielle Hayden: Not on a CPA firm. I’m going to say that because we’ve worked with a lot of tax accountants. Yes, once you’ve worked with it, it might be difficult for you to change but we see it all the time. A hair salon, yes, once you find a hair hairstylist that you love, you’re going to stay with that hairstylist and get your haircut every three, six months or for men every four weeks. If you are a yoga studio, you might sell a class pass per month and therefore that would be recurring revenue or you find people who love you. All right. I love my yoga studio and I don’t go anywhere else. And so, although I don’t have a monthly payment to them, I come to the gym on a regular basis.
Hilary Hendershott: Okay. And then also in this category would be a retail store, a boutique.
Danielle Hayden: Yeah, absolutely. A retail store, a boutique, that you would fall in product and brick and mortar.
Hilary Hendershott: Okay. And so, is it the cost of the brick and mortar, the rent that has you categorize them similarly?
Danielle Hayden: Yes, absolutely. That is so important. You have to think about, you know, if your starting rent is $2,500 per month, your first $2,500 in profit every month needs to go to just covering your space before utilities, consultants, or anything else. So, it’s really important when we’re looking at how much revenue we need to bring in to break even to be able to cover that amount.
Hilary Hendershott: Okay. That breakeven term is really important in what you do. So, do you want to say more about why you mentioned that number?
Danielle Hayden: Yeah. Breakeven is the first step to profitability. Obviously, I always breach profitability but breaking even is your first step. So, when we help a client determine what is their breakeven revenue, we will take all of their monthly reoccurring operating costs. That means the rents that you pay, the utilities, your internet, any of this software, or subscriptions that you must pay in order to continue to serve your clients. You need to add all of those up, and that is the minimum amount that you need to bring into your business in order to be able to breakeven and then become profitable. I always tell clients once you have that expense number, that breakeven number, you can then divide that by how many services or how many classes or how many haircuts you need to provide in order to be able to break even.
Hilary Hendershott: Perfect. Anything else for brick and mortar business owners to be keeping in mind?
Danielle Hayden: So, when we look at brick and mortar businesses, they have very different key performance indicators than somebody with a service-based business. And so, in that category, you may want to think about your square footage and if you’re thinking about expanding your brick and mortar space. There are some very key pieces of information that you can work with your bookkeeper in order to understand your revenue and understand your business further. And so, that’s why that one is put together in its own separate category because there are some very specialized metrics for you.
Hilary Hendershott: Okay. So, beyond just the profitability by product, you need to be thinking about how much money am I making per square foot that I’m paying to rent. Am I guessing correctly?
Danielle Hayden: Yes. Yeah, that’s perfect.
Hilary Hendershott: Okay. And you, obviously, and your consultative team are helping people customize these numbers.
Danielle Hayden: Yes, absolutely.
Hilary Hendershott: And then the final category is online and service-based businesses, and I kind of kicked off your and my pre-chat today by mentioning that this is the kind of business I have, and I felt in the beginning that people that were coaches who were trying to foist on me KPIs, key performance indicators, that didn’t really end up applying to my business at all. And I will say that over the time I have been working with a coach who I think does understand, I know does understand the numbers, and I’ve put together the standard operating procedure where every month my team has specific tasks that they do and they give me slides that show me my net income for the quarter, I get paid quarterly, so my net income for the quarter and costs and recurring costs. And we break out what I call cost of service, which is really just the cost of paying people, including myself, versus paying for things like rent or, i.e., computer equipment, and it’s really insightful. And what I have found is that it informs my activities. So, this view of my numbers that I didn’t have until maybe a year-and-a-half ago really gives me insight that then changes how I behave in my business the following month, and it’s massively helpful. And so, I just want to promote what you do by saying I don’t know how I could run my business without it now.
Danielle Hayden: Right. And that’s what most of our clients say, right? There are so many of them that come to us who are scared to even face their numbers. They’re so fearful around getting this information. And then once they start getting the information, they always say to us, “Wow. I can’t believe I ever went without it, and I feel so empowered.” And I’m so glad to hear that you’re making business decisions with it, right? You can decide, are you pricing your services right? Is your team spending the proper amount of time on each client? You know, you might find your team isn’t spending enough time with clients or they’re spending too much time with one or two clients. And you can understand what is working and what’s not working, or maybe where you’re spending too much money or where you need to decrease your spending so that the next month you are acting with intention in your business.
Hilary Hendershott: Right. And, well, just to share anecdotally so people really get the value of this is, yes, key performance indicators are things like profitability and net income. But what we’ve determined and what we now sort of colloquially call a key performance indicator in my business is the number of upcoming meetings with prospective clients because that’s the top of our funnel. That’s how we know what’s coming in. That’s how we know our activity level. And no, it’s not an accounting thing. I mean, I don’t need a bookkeeper to count the number of meetings I have in the next four weeks, right? But it gives me a sense of, where do I need to pay attention? Am I doing enough marketing? Have I done enough calls to action? Have I made those return phone calls? It really informs my activities that increase profitability. And that can be done for any business is my communication.
Danielle Hayden: Absolutely. And I’m glad you said that. I do still consider that an accounting key performance indicator. So, we talk about this in The Profit Planner book series and marketing key performance indicators are key performance indicators that can tell you about your upcoming revenue. So, I’m glad you said that because it could be, how many discovery calls do you have coming up? What is your close ratio? So, how many calls do you need?
Hilary Hendershott: I track that too, yes.
Danielle Hayden: Yeah, in order to close one client. So, those are all great revenue indicators.
Hilary Hendershott: Okay. I sort of took over this particular subcategory. What else do you want to say to online service-based business owners?
Danielle Hayden: So, we talked about this a little bit in the products, know your profitability by product but, well, let’s hone back in on this and say, “Let’s understand your profitability by service line and your profitability by client.” So, analyzing how much time your team as well as yourself, you should be time tracking too and so know how much time each of you are spending on clients and by service so that you know what to do more of and what to do less of.
Hilary Hendershott: Tell me about your best practices on time tracking. This is something I’ve tried to do several times and it makes me want to just put a hot dagger in my eye.
Danielle Hayden: So, I do time tracking for myself on a loose basis but my team all time track. So, I have a team of six bookkeepers who work with me at Kickstart and they are all tracking their time by clients. And that’s really important for us as a firm. Although we do not bill our clients based on the amount of hours that we spend working with them, all of our clients are on a flat monthly rate, it’s still important for me to be able to understand, are we spending enough time with our clients or not? For me, we use an app on our phones that makes it pretty easy. I know that if I forget to turn it off, I can easily adjust it. So, it’s also not taking it too serious. It’s not the Bible but it gives me a gauge as to where I’m spending my time.
Hilary Hendershott: Do you want to plug that app?
Danielle Hayden: Toggl.
Hilary Hendershott: Toggle, perfect.
Danielle Hayden: Yeah. Toggl. And they have a free version so it’s great.
Hilary Hendershott: Great. And do you track your time? I mean, for example, as a business owner, do you track your time 24 hours a day sometimes? Do you write down how much do I sleep, how much do I work out, things like that?
Danielle Hayden: I am an accountant through and through and so I’m pretty dorky from sunrise to sunset so, yes, I do.
Hilary Hendershott: I wish there was some way I could pay someone else to do it because I can’t seem to keep it in my mind to do it. How do you remind yourself? Do you have reminders every 30 minutes or something?
Danielle Hayden: Well, actually, I use my planner.
Hilary Hendershott: So, a nice segue.
Danielle Hayden: Yeah. When I wrote The Profit Planner, I wrote it because it was something that I was using but in a notebook. And so, that’s how I keep track of the beginning of the week on Sunday or Monday. I’ll go through, look at what I’m going to do every day. So, what time am I going to work out? What time do I pick up my kids? What time do I have meetings or recording podcasts? And I’m able to block out each of my days within that planner. And so, that really helps me to be able to keep that schedule.
Hilary Hendershott: You block your time in your planner in addition to keeping like a Google calendar?
Danielle Hayden: I do. I do.
Hilary Hendershott: What does that do for you?
Danielle Hayden: It’s taking pen to paper. So, I do use erasable pens. I will give a plug to erasable pens.
Hilary Hendershott: I haven’t seen an erasable pen since high school.
Danielle Hayden: It’s fantastic. You know what, somebody I worked with about a year ago, she gifted them to me and we still joke that she changed my life with these pens. So, I block my time. It is in my Google calendar but just taking that step back on Monday and writing everything out, I’m just able to see where I might have some overlap, where I might be able to say, “I know that doing that type of activity takes a lot of my energy and so I might not feel like taking a client call after I do that type of activity. I might feel a little drained and that for my client might not get the best coaching from me.” So, for me, it allows me just to kind of take a step back and look at, does this look realistic?
Hilary Hendershott: It’s really impressive. Organization is just such a great thing as a business owner. I just really don’t think you can be too organized. I thought I was organized then I hired a woman. Her name is Jen. Many of you on the podcast have heard from her before but she is about 1.8 times as organized as I am, and there are times she’ll bring me reports, and I think, “This is overkill. We’re double-tracking this.” But then I just get addicted to the report. It’s so great to have.
Danielle Hayden: Yeah. Well, and there’s a balance, right? So, there is a balance that you want to be efficient and not duplicating. But on the other hand, some things like that just really help me and it’s important to strike that balance.
Hilary Hendershott: Yeah. Perfect. Well, thanks for it. There was one other thing I wanted to make sure to ask you about. So, as a bookkeeper, what do you say business owners should be paying themselves and talk about payroll versus profit distributions and what those are, how do you advise your clients?
Danielle Hayden: So, when we talk about distributions versus payroll, remember to take a step back and think about how you’re structured. So, if you are an LLC, you are taking an owner’s draw and you should not actually be receiving a W-2. You should not be structured as an employee of your business because you are only taking owner’s draws. You are actually not a business expense of your business. That is different as you grow and you’re taking a regular owner’s draw from your business. We recommend for our clients to change to an S Corp. Once you become an S Corp, you can pay yourself as an employee where you can put yourself on payroll. This decision is different for every client but our signature framework that we provide our clients with is to look at your cash balance at the beginning of the month. So, at the end of every month, we will send our clients a financial report that has their historical financials. So, what they did last month, and then we’ll tell them, “This is what your cash balance is today. Here is your average operating expenses,” and we suggest clients have two to three months worth of operating expenses in their checking account to cover future expenses.
So, if something happened in their business, they can cover their expenses for two to three months, and then your ending balance. And so, from there, you can take what you need as an owner from that ending balance. But that gives you the comfort and the confidence to know, “I can pay my contractors next month. I can pay to keep the operations of my business running. And so, I can now confidently take that cash from my business.”
Hilary Hendershott: Perfect. And then how to think about or is there really a technical way to think about the proportion of payroll to profit distributions?
Danielle Hayden: I would definitely talk to your CPA and look at…
Hilary Hendershott: Your taxes, right?
Danielle Hayden: Yeah, your total personal story. So, if I was to give you a calculation right now, that’d be wrong of me because it really depends on your total situation and how much taxes you’re going to pay.
Hilary Hendershott: Perfect. And that it really is, I mean, that’s exactly my answer when people ask me questions like, “How should someone be saving in their 30s? How should they be saving in their 40s?” It’s like it’s not based on age. It’s based on your personal situation.
Danielle Hayden: Yeah. What else do you have going on? Yeah. Do you have debt?
Hilary Hendershott: Blanket recommendations don’t make sense, so I completely align. I just wanted to see if there was anything, any gold nuggets you wanted to drop. Anything else I didn’t ask about today, Danielle, before we sign off?
Danielle Hayden: Two big things. You know, if you are somebody who is struggling to understand your numbers or you’re saying to yourself, “I am not sure how to use these numbers to even make decisions in my business,” make sure you are getting the help. Talk to your mentor, your coach, your bookkeeper. We would love to help you but make sure that you are able to use the numbers in order to drive your business. They are telling you a story. We had a client recently who was growing her business and she launched a new brand. And we were sending her financial reports month after month and she realized that after six months, the brand was actually going to sink her business. And she was able to quickly make a decision that she needed to actually offload that brand and it saved her and it saved her family and her debt and her sanity.
Hilary Hendershott: Her marriage.
Danielle Hayden: Yes. So, the numbers are trying to tell you something. Don’t run from them. Read them and understand them. And then the second piece would be find a dashboard that works for you, whether it be the financial reports or we give a framework in The Profit Planner for a weekly dashboard. The point is don’t be afraid to really look at what you have in your business, what’s coming up, who owes you money, what contractor payments, what payments do you have coming, so that you can really be looking at your business, not just today from an emotional standpoint but from a real business standpoint where you can make good decisions.
Hilary Hendershott: Yeah. And I just want to be clear so people understand how to get to this dashboard that you’re recommending. There isn’t a tool or an app that’s going to be ideal for your business. It really does need to be created in a consultative relationship. Do you agree?
Danielle Hayden: Yes, absolutely. So, there are several different dashboards out there. We offer a framework in our Profit Planner book series, and we talked about some of these key performance indicators in these categories. There’s not going to be one size fits all. We talk about this all the time. Use a KPI, see if it works for you. If it doesn’t, stop doing it and find one that does tell you the right story.
Hilary Hendershott: Don’t throw the baby out with the bathwater.
Danielle Hayden: Yeah.
Hilary Hendershott: Perfect. Thanks for being here, Danielle.
Danielle Hayden: Yeah. Thank you for having me. I really appreciate it.
Hendershott Wealth Management, LLC and Profit Boss® Radio do not make specific investment recommendations on Profit Boss® Radio or in any public media. Any specific mentions of funds or investments are strictly for illustrative purposes only and should not be taken as investment advice or acted upon by individual investors. The opinions expressed in this episode are those of Hilary Hendershott, CFP®, MBA.