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The Financial Management Hack Every Entrepreneur Needs · Reborn w/ Antonio Boutros

• 0:05
  SPEAKER_00: Welcome to the Reborn Podcast with Tony Bootchurch, a show where we dive deep into personal development and entrepreneurship.
• 0:11
  SPEAKER_00: I'm your host, Tony Bootchur, and today we're going to explore a topic that hits close to home for many entrepreneurs: financial management.
• 0:19
  SPEAKER_00: I'll be sharing some personal stories and lessons I've learned to help you navigate the complex world of business finances.
• 0:27
  SPEAKER_00: Hey everyone.
• 0:28
  SPEAKER_00: Today I want to talk about a critical aspect of entrepreneurship that often gets overlooked in the rush for success: financial management.
• 0:36
  SPEAKER_00: In this episode, we'll discuss the importance of managing your finances, the dangers of rushing to scale your business, and understanding the cash conversion cycles.
• 0:45
  SPEAKER_00: These lessons come from my own experiences, including a time when I was making between$50,000 to$100,000 a month, but had less than$10 in my bank account.
• 0:59
  SPEAKER_00: Yeah, you you heard that right.
• 1:02
  SPEAKER_00: Let's start with the story.
• 1:12
  SPEAKER_00: And on the surface, everything looked perfect.
• 1:17
  SPEAKER_00: But beneath that shiner, shiny exterior, there was a harsh reality.
• 1:24
  SPEAKER_00: Despite an impressive revenue, I was struggling with less than$10 in my bank account.
• 1:33
  SPEAKER_00: How did this happen?
• 1:35
  SPEAKER_00: For financial management.
• 1:37
  SPEAKER_00: I remember vividly a time when a major bill came due and I couldn't cover.
• 1:44
  SPEAKER_00: I had to scramble to find the funds, and that was a huge wake-up call for me.
• 1:51
  SPEAKER_00: It wasn't just about making money, it was about managing it wisely.
• 1:56
  SPEAKER_00: See, one of the biggest mistakes I made was rushing to scale my business without having a solid financial foundation.
• 2:04
  SPEAKER_00: I was so focused on growth that I overlooked the importance of sustainable scaling.
• 2:11
  SPEAKER_00: I invested heavily in new projects and staff, thinking that rapid expansion would automatically lead to more profit.
• 2:20
  SPEAKER_00: Instead, it led to more financial strain.
• 2:23
  SPEAKER_00: I didn't account for the increased expenses that came with scaling, and it nearly sank my business.
• 2:32
  SPEAKER_00: Another crucial lesson I learned was about a cash conversion cycle.
• 2:36
  SPEAKER_00: For those who might not be familiar, the cash conversion cycle is the time it takes for your business to convert investments into cash flow.
• 2:44
  SPEAKER_00: Understanding and optimizing this cycle is vital for maintaining healthy cash flow.
• 2:50
  SPEAKER_00: In my case, I was so focused on revenue that I didn't pay attention to how long it took it took to turn that revenue, or rather, in my case, how long it took to turn that investment putting money in into actual cash in the bank and getting money out.
• 3:08
  SPEAKER_00: This oversight created significant cash flow problems, especially during periods of rapid growth.
• 3:16
  SPEAKER_00: So, what can you do to avoid these pitfalls?
• 3:18
  SPEAKER_00: Here are a few practical tips.
• 3:21
  SPEAKER_00: First, keep a close eye on your cash flow regularly and monitor your income and expenses to ensure you have a clear picture of your financial health.
• 3:31
  SPEAKER_00: One thing I've heard from Alex Hermosy is you know, rather than checking social media every morning, checking your bank account every morning.
• 3:41
  SPEAKER_00: And not only will that motivate you to increase it, that'll also give you a better idea and less anxiety about where you are financially.
• 4:00
  SPEAKER_00: Take your time to build a solid financial foundation before expanding your business.
• 4:06
  SPEAKER_00: I had been dumping money into marketing, which was working, but I didn't understand the cash conversion cycle.
• 4:15
  SPEAKER_00: I also was hiring, and that did not work either.
• 4:20
  SPEAKER_00: And so understand your cash conversion cycle.
• 4:23
  SPEAKER_00: Make sure you know how long it takes to convert your investments into cash flow and work if you can to shorten this cycle.
• 4:31
  SPEAKER_00: Now, in my business and in most businesses, there are marketing and sales, and actually, in all businesses, there are marketing and sales.
• 4:41
  SPEAKER_00: And my business specifically is a very marketing and sales heavy business.
• 4:51
  SPEAKER_00: It's not a ton of product, it's mostly marketing and sales.
• 4:54
  SPEAKER_00: And so there are several different channels uh we have the opportunity to use for marketing to get clients and uh people in the door, and and some of them take nine months to see the cash conversion cycle work out.
• 5:12
  SPEAKER_00: Others only take one month, two months, three months.
• 5:16
  SPEAKER_00: And so if I know that by the numbers, I am able to work to shorten my own business's cash conversion cycle and get cash in a door sooner rather than later.
• 5:29
  SPEAKER_00: Now let's move to our FHU section.
• 5:31
  SPEAKER_00: There are these are some of the common questions I get from fellow entrepreneurs.
• 5:35
  SPEAKER_00: How do I start managing my finances better?
• 5:39
  SPEAKER_00: And what I've learned the very hard way, again, having less than$10 in the bank while making$50 to$100 a month,$50 to$100,000, begin by tracking all your income and expenses.
• 5:54
  SPEAKER_00: Because the thing is when I was when when this was happening, I wasn't hardly tracking anything when it came to income and expenses.
• 6:06
  SPEAKER_00: I wasn't tracking this should be coming in, this should be going out, this should be coming in, this should be going out.
• 6:12
  SPEAKER_00: And so I was disorganized.
• 6:16
  SPEAKER_00: And uh also use financial management tools or hire an accountant if needed.
• 6:22
  SPEAKER_00: If you're making 50 to 100 or more, or even maybe less, an accountant who you're gonna pay is well worth it.
• 6:34
  SPEAKER_00: And understand where your money is going and where you can cut unnecessary costs.
• 6:38
  SPEAKER_00: Now, uh again, this was very, very recently for me that I had the$10 in the bank uh with with that income.
• 6:46
  SPEAKER_00: And uh what I noticed was I was making uh I had some tools that I didn't really need.
• 6:54
  SPEAKER_00: And so some of my money was going into places where I that were unnecessary, and so I cut unnecessary costs.
• 7:02
  SPEAKER_00: Now, the biggest thing for me was that I was investing too much too quickly, and and it just caught up.
• 7:11
  SPEAKER_00: What are some signs that I am scaling too quickly?
• 7:14
  SPEAKER_00: If your expenses are growing faster than your revenue, or if you're constantly struggling with cash flow despite high revenue, these are red flags that you might be scaling too fast.
• 7:24
  SPEAKER_00: Now, for me, revenue and and cash flow work simultaneously at the same exact time.
• 7:32
  SPEAKER_00: I know there are some businesses that have a delay.
• 7:35
  SPEAKER_00: My business is money in, money out.
• 7:38
  SPEAKER_00: It's very, very basic.
• 7:40
  SPEAKER_00: And my issue was putting too much money in and not waiting for it to come out, but continuing to put it in.
• 7:54
  SPEAKER_00: And now, how can I improve my cash and measure cycle?
• 7:57
  SPEAKER_00: Now, this does depend on the the industry, the business, and and this is something that you probably will know more specifically than I will in your specific business, but uh focus on shortening the time it takes to collect payments from customers and negotiate better terms with suppliers, uh a finch it and the Troy management can also help.
• 8:20
  SPEAKER_00: Uh again, for me, this is just a matter of where are we spending our marketing dollars, right?
• 8:26
  SPEAKER_00: Uh, and then on the other end, how quickly can we get to the closing table?
• 8:32
  SPEAKER_00: Because I'm a real estate investor, I buy and sell real estate.
• 8:36
  SPEAKER_00: And so if I have a uh a buyer that I'm selling a property to that can get you to the closing table in seven days as opposed to 21 days, and I'm also using a marketing channel that I can get uh a property that I can buy within a month as opposed to nine months, then my cash conversion cycle is going to be 10 times in this scenario shorter, or almost 10 times.
• 9:00
  SPEAKER_00: And so that wraps up today's episode of the Reborn Podcast.
• 9:04
  SPEAKER_00: I hope my personal stories and the lessons I've shared help you navigate your own entrepreneurial journey.
• 9:09
  SPEAKER_00: Remember, it's not just about making money, it's about managing it wisely.
• 9:13
  SPEAKER_00: If you have any questions or want to share your experiences, feel free to reach out to me.
• 9:17
  SPEAKER_00: Thank you for listening.
• 9:18
  SPEAKER_00: Until next time, stay reborn.