Latest / Online Business Tips: Mind Your Time / How to Unlock Financial Confidence with a Simple Money Management System

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How to Unlock Financial Confidence with a Simple Money Management System · Online Business Tips: Mind Your Time

• 0:00
  Speaker 1: Keeping track of your business finances isn't just about getting by.
• 0:03
  Speaker 1: It's what sets the stage for sustainable growth and success.
• 0:06
  Speaker 1: So today we're breaking down one of the six core systems every business needs.
• 0:12
  Speaker 1: That's, a money management system.
• 0:13
  Speaker 1: So if you're tired of stressing over where your money's going and you want to feel more confident about your finances so you can make informed decisions, then this episode is for you.
• 0:25
  Speaker 1: Welcome to the Mind your Time podcast.
• 0:27
  Speaker 1: I'm Shannon Baker, your coffee-loving host and business strategist.
• 0:30
  Speaker 1: Each week, I will share practical insights and bold strategies for six-figure entrepreneurs looking to clean up their back office and create streamlined systems.
• 0:39
  Speaker 1: The weekly episodes will help you take control of your time, scale your business and create success on your own terms.
• 0:46
  Speaker 1: So grab your cup of coffee or your favorite beverage and let's dive into today's topic.
• 0:53
  Speaker 1: Did you know that nearly half of the small businesses that are started fail within the first five years?
• 0:58
  Speaker 1: And it's not because the business owners aren't working hard.
• 1:02
  Speaker 1: It's usually because they don't have a handle on their money.
• 1:07
  Speaker 1: Managing your business finances can sometimes feel like you're trying to put together a puzzle, but you don't have all the pieces.
• 1:13
  Speaker 1: So if you've ever felt this way, believe me, you're not alone.
• 1:18
  Speaker 1: In fact, most, if not all, entrepreneurs struggle with this very thing, which is why a money management system is one of the core systems we all need to have, but it's often not one we have in place.
• 1:37
  Speaker 1: You know, the other day I was chatting with a fellow entrepreneur over coffee, of course and she said something that stuck with me.
• 1:45
  Speaker 1: She said sometimes she feels like she's making money just to watch it disappear and she doesn't know where it's going.
• 1:54
  Speaker 1: She kind of laughed it off, but I could really tell that there was a lot of frustration behind that statement, and I get it because I've been there too.
• 2:04
  Speaker 1: When I started my virtual assistant business, I didn't have a system to track my income or my expenses and, on top of that, my business and my personal finances were completely co-mingled, which should not be happening, but no one really told me that or how to separate them.
• 2:22
  Speaker 1: Everything was flowing in and out of multiple personal accounts and I had no clear picture of what money belonged to the business versus what was a personal expense and how to reconcile it all.
• 2:34
  Speaker 1: And let me tell you it was a complete and utter mess.
• 2:38
  Speaker 1: I was constantly playing catch up, trying to piece together where exactly the money I was making in my business was going, and tax time was a complete nightmare, because I would have to scramble to pull together receipts and statements to figure out what exactly I had paid out to keep the business running.
• 2:57
  Speaker 1: The stress of it all was overwhelming and I remember thinking, man, I'm working really hard, but where's all my money going?
• 3:05
  Speaker 1: It felt like I was just running in circles and getting nowhere.
• 3:10
  Speaker 1: And it wasn't until I decided to sit down and create a simple money management system that things started to change.
• 3:19
  Speaker 1: So the first thing I did was I opened a PayPal business account so that I could invoice my clients and track my money coming in through the reports that the system generates.
• 3:31
  Speaker 1: This also meant that I had a place where my business income would be kept and it was separate from my personal accounts and used just for the business.
• 3:40
  Speaker 1: And because I had a business debit card, I could pay my bills from that account instead of using my personal accounts until I was ready to open a business account.
• 3:51
  Speaker 1: So suddenly I could see exactly what my recurring expenses were all in one place and my clients were automatically billed each month.
• 4:02
  Speaker 1: So for the first time, I wasn't just reacting, I was able to plan, and this system gave me the clarity that I needed to make smarter decisions.
• 4:12
  Speaker 1: I could finally separate what was a personal expense and what was a business expense.
• 4:17
  Speaker 1: It helped me to create a clear budget.
• 4:20
  Speaker 1: I could plan for growth and I was even able to pay myself consistently.
• 4:25
  Speaker 1: And let me tell you, once I had that system in place, it was like a weight was lifted off of me.
• 4:31
  Speaker 1: I wasn't just working harder, I was working smarter and making decisions with confidence and even getting more sleep at night.
• 4:40
  Speaker 1: Why?
• 4:40
  Speaker 1: Because money is one of the hottest topics that can spark an argument in your home.
• 4:44
  Speaker 1: I know this firsthand, especially when the money is one of the hottest topics that can spark an argument in your home.
• 4:45
  Speaker 1: I know this firsthand, especially when the money is running short and many business owners struggle with this exact issue because they don't have a handle on their finances.
• 4:57
  Speaker 1: But the good news is it's absolutely a fixable issue.
• 5:01
  Speaker 1: A fixable issue.
• 5:06
  Speaker 1: So today I'm going to talk about how you can set up a simple money management system so you can take control of your business finances.
• 5:10
  Speaker 1: And this isn't about creating spreadsheets that make your head spin or getting some complicated and expensive software.
• 5:18
  Speaker 1: It's about creating clarity in your business, building confidence in your numbers and knowing exactly where your money is going.
• 5:24
  Speaker 1: And before we're done today, I'll tell you how we can work together to get this system up and running so that you can stop worrying about it and start focusing on doing what you love.
• 5:33
  Speaker 1: So here's the thing you can't make smart business decisions if you don't know your numbers.
• 5:41
  Speaker 1: So, whether it's investing in a new tool, hiring help or even planning a vacation, it all comes back to understanding what's happening with your money.
• 5:50
  Speaker 1: Here's a perfect example.
• 5:54
  Speaker 1: I had a client who came to me during her first year in business.
• 5:57
  Speaker 1: She is an amazing caterer and that first year made over $70,000, at least on paper.
• 6:05
  Speaker 1: But when she checked her bank account at the end of the year, there was barely anything left, and she was frustrated and confused because she couldn't figure out where all the money had gone.
• 6:16
  Speaker 1: So here's what we uncovered she wasn't tracking her expenses, so she wasn't keeping tabs on her cash flow.
• 6:24
  Speaker 1: She had no idea what her profit margins were, especially when it comes to the costs that were related to an event, so that's ingredients, supplies or labor.
• 6:34
  Speaker 1: She also had employees that were helping with events, but she didn't have a system to track their hours.
• 6:40
  Speaker 1: So without knowing her labor costs, she couldn't accurately calculate how much she was spending to fulfill her contracts.
• 6:48
  Speaker 1: And because her pricing wasn't based on actual costs, she was losing money on some of her catering gigs and she didn't even realize it.
• 6:59
  Speaker 1: So the first thing we had to do was to set up a basic money management system.
• 7:03
  Speaker 1: We started by tracking recurring expenses on a spreadsheet.
• 7:06
  Speaker 1: Then we added in those one-time costs and event specific costs, which are, you know, the ingredients and the related rentals.
• 7:14
  Speaker 1: We also implemented a simple electronic check-in system for her employees so that we could one track their attendance and their labor hours.
• 7:24
  Speaker 1: Put this all together and she was able to see exactly how much she was spending on staffing and her expenses for every single event.
• 7:32
  Speaker 1: So because of these systems, she finally had a full picture of all the pieces of her business finances.
• 7:40
  Speaker 1: She could see where her money was going, adjust her pricing to reflect her true costs and make more intentional and informed decisions.
• 7:49
  Speaker 1: For example, she realized that certain events required more staffing than she originally thought, which was eating into her profits.
• 7:58
  Speaker 1: But by knowing her numbers, she was able to adjust her pricing and negotiate with clients more confidently, and because of that her business started to grow, continued to grow and she could see her profit grow as well.
• 8:13
  Speaker 1: This shows why it's so important to create systems for your finances.
• 8:18
  Speaker 1: Without them, even the hardest working business owner can struggle to turn a profit.
• 8:24
  Speaker 1: So let's talk about where you can start.
• 8:26
  Speaker 1: That's money going out, also known as accounts payable, and it generally falls into three categories.
• 8:32
  Speaker 1: Recurring monthly expenses these are things like subscriptions for tools that you use in your business email marketing platforms, scheduling software.
• 8:41
  Speaker 1: That's stuff you pay for every month.
• 8:43
  Speaker 1: Then you have annual recurring expenses.
• 8:46
  Speaker 1: Think of professional memberships, your website hosting, email hosting or tools that you use in your business that you pay the bill every year once a year instead of monthly.
• 8:57
  Speaker 1: Then you have one-time expenses.
• 8:59
  Speaker 1: This could be things like going to conferences, professional development, networking events, purchasing equipment all those things that's one-time.
• 9:11
  Speaker 1: So you can start by creating a spreadsheet with all of these items.
• 9:15
  Speaker 1: On it, you list the name of the expense, the amount of the expense if it's recurring, the due date and how are you paying it.
• 9:24
  Speaker 1: This gives you a clear picture of where your money is going, and it's a lifesaver, especially when you need to update payment information, like when you have to get a new credit card.
• 9:34
  Speaker 1: And don't forget, you need to organize your receipts.
• 9:39
  Speaker 1: I know it's not glamorous, but it's essential.
• 9:42
  Speaker 1: You can create a digital filing system that makes this easier, and if you're not sure where to start, go and check out my episode.
• 9:50
  Speaker 1: Transform Frustrating Chaos with a Game-Changing Filing System.
• 9:54
  Speaker 1: This is another one of the six core systems you need to have in place, but in that episode, I'll walk you through the exact steps that you can take to create a system that works for you.
• 10:04
  Speaker 1: Trust me, this is going to save you a lot of time and stress, especially in tax season, so I'll put a link to that in the show notes.
• 10:12
  Speaker 1: Now, once you've tackled tracking your expenses and your receipts, you need to monitor your cash flow, which is also known as accounts receivable, or that money you got coming in.
• 10:22
  Speaker 1: This isn't just about knowing how much you made last month.
• 10:27
  Speaker 1: It's about looking for patterns.
• 10:28
  Speaker 1: Maybe you'll notice that most of your income comes in during certain months and other months are slower.
• 10:35
  Speaker 1: With that insight, you can then plan ahead and avoid having to scramble because money is tight.
• 10:42
  Speaker 1: Whether you send invoices or you rely on auto billing, which I highly recommend, you need to track those payments as they come in and if you work with clients on a recurring basis, you need to have a process for if a payment is declined or a payment is late, and there should be clauses in your service agreement that clearly identifies what happens when you're not paid on time.
• 11:06
  Speaker 1: That's where templates for reminders and follow-ups can save you time and make sure you get paid on schedule.
• 11:16
  Speaker 1: Now for my clients and members of the Mighty Society membership.
• 11:18
  Speaker 1: We always start with a simple business expense spreadsheet.
• 11:22
  Speaker 1: It's one of the resources included in the membership and it's designed to help you identify and track your monthly and one-time expenses at a glance.
• 11:31
  Speaker 1: But that's just the beginning.
• 11:33
  Speaker 1: The membership also gives you access to other tools, templates and workflows to help you not just manage your finances but your entire back office with ease, without having to Google a bunch of things or look at a bunch of videos on YouTube.
• 11:48
  Speaker 1: Let me emphasize this Having your numbers in front of you is so empowering.
• 11:55
  Speaker 1: It allows you to identify gaps, spot opportunities, to save time and money, and they help you plan for growth.
• 12:03
  Speaker 1: And if you're a creative, like a catering client, or you have some kind of product that you produce, knowing the cost of your materials, labor and even your time is essential for pricing your products and services in a way that not only reflects your true values, but it leaves you with a decent profit margin.
• 12:27
  Speaker 1: But I also know that when it comes to money, fear can easily creep in.
• 12:32
  Speaker 1: You may worry that you're not making enough money to support your family, or maybe you're afraid of taking risks because you don't feel confident about your finances.
• 12:42
  Speaker 1: But guess what?
• 12:44
  Speaker 1: You started a business, so you're already a risk taker.
• 12:47
  Speaker 1: Embrace that and keep moving forward, and some of you might feel overwhelmed, simply because you're just not good with numbers.
• 12:56
  Speaker 1: And let me tell you, all of these fears are valid, but you don't have to let them hold you back.
• 13:07
  Speaker 1: Imagine this instead what if you don't have to figure this out on your own?
• 13:10
  Speaker 1: What if you had a partner, someone to help you create a system that works for you and made managing your finances simple and pretty much stress-free?
• 13:16
  Speaker 1: Well, that's exactly what we can do together during a boost day.
• 13:21
  Speaker 1: In this day, we can set up your money management system and create processes for tracking your expenses and your income.
• 13:31
  Speaker 1: I'll even help you implement tools to handle things like labor costs or payment reminders, and, by the end of the day, you're going to have a plan for managing your money and a system in place that takes the guesswork out of your finances.
• 13:45
  Speaker 1: So no more worrying, no more procrastinating let's get it done.
• 13:50
  Speaker 1: This will make tax time so much easier for you.
• 13:55
  Speaker 1: So let's recap what we've talked about today.
• 13:57
  Speaker 1: A money management system is essential for running a sustainable business that grows.
• 14:03
  Speaker 1: So, whether you're tracking cost to price your products or managing recurring expenses, you need to have a clear picture of your finance so that you can be in control and make informed decisions.
• 14:14
  Speaker 1: Now, if you're ready to get started and, you know, take a stab at this on your own then the Mighty Society membership has that business expense spreadsheet that I talked about, and that is a great place for you to start so you can hit the ground running Now.
• 14:30
  Speaker 1: If you want hands-on support and you just want to get this done, then a Boost Day with me is the perfect option for you.
• 14:36
  Speaker 1: We can get this set up together so that you can focus on moving forward with clarity and confidence in your business.
• 14:44
  Speaker 1: If you have questions about anything that I've talked about today, feel free to DM me on Instagram, or, if you're ready to go ahead and get started with the Mighty Society membership.
• 14:55
  Speaker 1: Go to theshannonbakercom forward slash membership to learn more about it and to go ahead and join Now.
• 15:05
  Speaker 1: Today we talked about tracking and managing your money, and you may be thinking well, that's great, but I'm not really making any yet.
• 15:11
  Speaker 1: Well, meet me back here next week because we're going to talk about the two components that every business needs to make money a sales and marketing system.
• 15:20
  Speaker 1: Thank you for tuning in this week, remember, just listening to this episode will not get you better results, so I challenge you to break the mold and take action today.
• 15:30
  Speaker 1: If you're unsure where to start, book a call with me to get your questions answered about the Mighty Society membership or anything else that I mentioned.
• 15:39
  Speaker 1: A link to my calendar is in the show notes.
• 15:43
  Speaker 1: Not ready to take that step yet?
• 15:44
  Speaker 1: No problem.
• 15:45
  Speaker 1: Be sure to connect with me on Instagram, at the underscore Shannon Baker.
• 15:50
  Speaker 1: You can ask me your questions there, or let me know that you enjoyed the episode by taking a screenshot, sharing it and tagging me.
• 15:59
  Speaker 1: Now, if you haven't already grabbed my free audio masterclass, why don't you just start there?
• 16:06
  Speaker 1: It's a great first step to assess your back office on your own, and this masterclass provides valuable insights and practical steps to help you organize your processes, reduce chaos and improve efficiency.
• 16:21
  Speaker 1: Go to theshannonbakercom forward slash audio masterclass Now, if you haven't left a review for the podcast yet, please do so.
• 16:31
  Speaker 1: I would love to hear from you, and it's an easy way to show some love to the podcast and help me reach more small business owners who are ready to defy the status quo.
• 16:41
  Speaker 1: I can't wait to hear from you.
• 16:44
  Speaker 1: So until next time, keep calm and streamline.