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small business accounting

Matt Baker – Small Business Accounting for the Rest of Us: Why Knowing Your Numbers is Imperative to Sustainable Self-Employment (AoL 160)

Small business accounting is a topic that many entrepreneurs needlessly struggle with when they’re getting their feet wet with running a business. For me, I have a simple tracking system of my expenditures. And usually, when it comes to invoicing, I usually opt to get paid on the front end. Outside of that, I really don’t have too much to keep track of.

However, I realize I’m not a true representation of most business owners. Most business owners need a platform that can do more than AR/AP. They might need something that takes care of payments and is a CRM on top of that. A one stop location for all of your financial bookkeeping.

That’s where Freshbooks comes in.

In our chat today, Matt Baker, VP of Corporate Strategy and International Expansion at Freshbooks, shares with us what numbers of business owners should be paying attention to.

We also discuss the process of de-risking the move to self-employment as well as what he’d recommend to entrepreneurs starting out in the Midwest.

Enjoy!

SPECIFICALLY, YOU’LL FIND OUT MORE ABOUT:

  • If Disney were to make a movie about Matt, what it’s genre be and how would it begin? 6:42
  • What’s Matt’s thoughts on going to college in today’s career climate? 12:15
  • How can someone de-risk the move to self-employment? 16:30
  • What would he recommend to folks wanting to start a business in the Midwest? 20:53
  • Is social media creating an unrealistic vision of what it takes to be an entrepreneur? 24:55
  • Who’s a realistic role model someone can follow to learn to start their business? 28:04
  • How safe is being a W2 employee for the foreseeable future? 29:59
  • What are some steps that someone can do to take control of their career? 33:56
  • What financial numbers should a small business owner pay attention to? 37:42
  • When things are going wrong for businesses in their finances, where does it typically go wrong? 42:18
  • What does Matt see himself doing the rest of 2019 and beyond? 44:49
  • What 3 influential podcasts does he listen to on a regular basis? 48:16
  • One gift Matt likes giving other people? 49:17
  • What’s an issue that more people should be talking about? 50:35
  • When Matt becomes overwhelmed or unfocused, what’s he do? 51:50
  • What’s it mean to live a life of abundance? 53:06

ITEMS and PEOPLE MENTIONED IN THIS EPISODE:

Right click here and save-as to download this episode to your computer.

SHOW NOTE EXTRAS:

#imakealiving Los Angeles Preview

Creating a Genuine Brand in the Digital World

Bill Morrison on Learning on the Fly

How to Avoid Small Business Bankruptcy


Thanks for Listening!

Thanks so much for joining us again this week. Have some feedback you’d like to share? Leave a note in the comment section below!

If you enjoyed this episode, please share it using the social media buttons you see at the top of the post.

Also, please leave an honest review for The AoL Podcast on iTunes! Ratings and reviews are extremely helpful and greatly appreciated! They do matter in the rankings of the show, and we read each and every one of them.

If you have any questions feel free to email them over via the email mentioned in the show or by our contact form.

And finally, don’t forget to subscribe to the show on CastboxiTunesStitcherPodBean, and/or Google Play Music. It’s absolutely free to do so.

A huge thank-you to you guys for joining us!

Cheers!

entrepreneurial finance

Real World Strategies in Entrepreneurial Finance

This past week I had another chance to go to a business accelerator event here in Indy. This one was hosted by Techstars, who helps sports based businesses with entrepreneurial finance here in Indiana.

As I was listening to the pitches by various companies, (some I’m sure you’ll be hearing about soon in your everyday life!) I started thinking about how some of them had seen such great success in fairly quick periods of time.

Not only were there founders from these various companies in the room, but they were joined by representatives from sports partners from around the city. This included the Pacers, the Colts, Indiana Sports Corp, the Indianapolis Motor Speedway and others.

Soon I started thinking about a common connection of the talent I saw in the room. The success here was different than you hear about from the online entrepreneurial world.

The companies in the room were talking about sustainable growth and building opportunity and jobs in the community. Online, you hear more about “earn $5k in your first month doing…”.

In short, it’s looking at long term decisions yielding true wealth vs short term hustle.

And, really, I think successful online entrepreneurs are doing their followers and students a disservice. On top of how to create income online, they should also teach them how to leverage the funds they already have to keep growing!

The Hustle Approach to Finances

When we think of online business, many of us think of 24/7 hustle. We think if you’re not working, than you’re limiting yourself. Why hang out with friends and family when you should be out there making content or the next deal? It’s only when you’ve been successful doing these things that you’ll have your Ferrari and nice high-rise apartment. 

So go out and get it done!

Well, for one, that mentality doesn’t necessarily apply to everyone in business. There’s people who aren’t the best hustlers, but they’re great at making the hustlers around them more efficient.

And, two, this thought process suggests that you can always outearn any financial issues that you’re having. If you just bring in more income, you’ll be richer.

That isn’t necessarily the case.

In fact, I’d say that more often than not, when people earn more, they’ll spend more. And if your goal is to be wealthy in all aspects of your life, this method isn’t going to get you too far.

That said, there’s other bad financial decisions a business owner can make. So let’s take a look at those before we start improving our decision making.

Bad Entrepreneurial Financial Habits

When it comes to where people go wrong with their finances, there’s a few that are pretty widespread. Here’s a few examples:

No Personal Organization

I can’t tell you how many times I’ve met first time entrepreneurs who don’t know anything about keeping records of their business. They don’t have a system for receipts, they don’t have a business banking account, and really, they’re not sure what their actual profit is.

No Tax Strategy

So, of course, because they’re not actively keeping track of their expenses and profit, there’s really no existence of accounting. So, everything gets cramped up to the last 2 or 3 weeks before the yearly tax deadline. And really, that makes things so much more stressful than it needs to be.

Money Is Earned to Spend

On the podcast, one of the questions I occasionally ask the rapid fire question segment is “What is something that all high school students must know?”. Often, the response is something to do with the management of finances.

We live in a world where we’ve grown up with media telling us to “Buy New, Buy Now”. Consumerism is king. If you don’t actively participate, you’re not part of the “in crowd”. So without financial education in schools, thinking that you have to keep up with the Kardashians is pretty prevalent.

As I’ve found out, wealthy people and successful entrepreneurs know how to create cash flow, but they also know how to manage their finances.

Changing Your Financial Paradigm

If any of the above sound like habits that you use in your business and life, it might be time to make a few tweaks.

Here are a few basic concepts I’ve learned about managing wealth.

Think of Money as Water

When I think about money, I look at it as a resource. In fact, I look at it like I would water in a post-apocalyptic world like you’d find in The 100 or Mad Max.

In that type of environment, water is more than just water. It’s a commodity. And because water is vital to life, clean water is going to be in short supply. Just like money is today for so many people.

If we had a way of providing clean drinking water in that world, we’d have the potential to be on the top of society.

Same thing is true with your business and its ability to make more money at will.

With that type of mindset, I think it’s easier to get a grasp on how money should be used. Here’s a couple of habits you can practice to be more successful in this arena.

Keep Track of It

If we’re looking at money as a resource that we have to be smart with we need to have metrics on where we’re at any specific time. In our analogy, we need to know how much is going out to the market. We also need to know if anyone is stealing any.

So with that in mind, it’s important that we get used to regularly checking our bank account. On top of that, we need to keep track of income and expenditures. 

Get used to asking yourself and tracking:

  • How much do we plan to make versus how much we actually did. 
  • How much do we predict to spend versus how much we actually did.

Cut things out when necessary.

Build Up a Reserve

If you’re the person in charge of delivering clean water to a community in this new world, you might want to consider something.

What if there’s a problem in getting the water? What if the rain doesn’t fall or the wells don’t work? How long does it take for you and the leaders of the community to start growing concerned?

If your business functions on the funds that you get directly from income, then you might have a potentially huge problem. Be prepared and build at least a month’s reserve of cash for emergencies. Or even better, perhaps 90 days or more. The bigger the reserve, the more insurance you give yourself to be able to dig yourself out of a bad situation.

However, just like water that sits in a reservoir or lake, if money isn’t moving, it’s not doing you any good. Naturally, if water is stagnant, then it tends to go bad. A great example of this is the Salton Sea in California. However, if there’s inflow and outflow of water such as a river, then the water is useful for sustaining life.

Same thing for money. If money is stagnate, then we tend to get overprotective of that money. Being frugal and smart with money is one thing. Being a miser and potentially those around you miserable, is another. You don’t want to be a Scrooge from a Christmas Carol.

Leverage Your Position

As this successful water provider, you’re doing your job well when everyone is getting an adequate supply. If people feel like this isn’t a problem, then it’s one less stresser in their life. Heck, the more they have, the less they think about it.

What if your community has such a huge reservoir of water that you can start using it to trade with other communities who might not be so lucky?

At that point, you’re leveraging your position with the excess of your resource to get things in return. Sure, you might not have as much water left over in your reserve, but you are gaining things in exchange for it. Which those might be more valuable in your own community than water.

In our business, it’s a bit more simple. The more money we have in reserve, the more options we have. We need to know the difference between liabilities (fancy cars, eating out, partying, etc.) vs assets (using better tools, hiring a team, etc) when it comes to making more money. The more assets you have, the greater potential we have for generating more income.

Action Steps

So, to help you make this transition, I have a few recommendations for you to start getting better at finance. 

The first thing I’d recommend is read or listen to Rich Dad, Poor Dad. And really think about anything that the author Robert Kiyosaki has to say. He has a good enough track record that students at Purdue’s entrepreneurship department used his info in creating their own businesses when I was there.

Next, I’d recommend getting a business bank account. Keep business money separate from your personal money.

Also, I’d develop something (maybe even a spreadsheet) to monitor your cash flow. Again, how much are you forecasting yourself to earn? How much did you earn in comparison? Same thing with expenditures? Where can you cut out if necessary? This information is great to have if you ever hire an accountant to help.

Finally, I’d look into subscribing to Quickbooks and anything else that might make your accounting easier. If you don’t have a business credit card that you put all your expenditures on (which I highly recommend) then you’ll need to manually keep track of receipts. You can do it as you go with Quickbooks, but if you like waiting to the end of the month, you can use a service like Shoeboxed to do it all for you.

breaking into wall street

Relationships Are Everything – From Breaking into Wall Street to Capitalizing on Capital with Marc Davenport (AoL 143)

They say if you can make it New York, you can make it anywhere. In that same spirit, many people see having a job or a career on Wall Street as a way to launch themselves to success.

This is pretty understandable. Over the years, there have been some movies which illustrated a simple idea. That idea being you can start from meager beginnings and become wealthy beyond your wildest dreams if you make it on Wall Street.

I believe this is the case for this session’s guest, Marc Davenport.

Having started his career off on Wall Street, he learned a ton. But he also started to develop a network of influential people. That network has helped him get to where he’s at today.

In this chat, join Marc and I as we discuss what all he learned on Wall Street, why he started his first business after having that success, and some of the things we can all do to help ourselves in our own journey.

Enjoy!

SPECIFICALLY, YOU’LL FIND OUT MORE ABOUT:

  • What initially spurred Marc to become a Wall Street investor early in his career? 7:36
  • Was there something that prompted Marc to start his own consulting business? 10:27
  • What prompted Marc to start RMI Capitol after having great success with his consulting company? 14:50
  • How do real relationships make things happen? 15:52
  • What kind of clients is Marc looking to service with RMI Capitol? 23:03
  • What can someone expect to learn about on his YouTube channel? 24:55
  • From Marc’s perspective, why is that people like our mutual friend Antonio Smith have the success that they do in business? 28:09
  • Why does Marc find it important to be involved in so many organizations in the community? 35:03
  • What’s some of the things that Marc is looking forward to in 2019? 39:48
  • What are 3 Favorite books that he gifts or tells others about? 43:57
  • What does he do when he becomes unfocused or overwhelmed? 46:02
  • Are there some things that he’s been saying no to in the last couple of years? 46:23
  • What’s the best advice he’s ever received? 47:58
  • How does one live a life of abundance? 48:47

ITEMS and PEOPLE MENTIONED IN THIS EPISODE:

Marc Online: Facebook, LinkedIn, Twitter, YouTube
Session Sponsor: Uncover Your Personal Mission
Lee Daniels
Saphire’s Story: How ‘Push’ became ‘Precious’
Antonio Smith’s Aol Interview
Bill and Melinda Gates Foundation Fact Sheet
How to Win Friends and Influence People by Dale Carnegie
Why Should White Guys Have all the Fun? by Reginald Lewis
Greatest Salesman in the World by Og Mandino
As a Man Thinketh – Earl Nightingale


Right click here and save-as to download this episode to your computer.

SHOW NOTE EXTRAS:

The 5 C’s of Credit 

How to Double Your Revenue

Antonio and Marc on What it Takes to be Wealthy

How to Build a Network of Influential People


Thanks for Listening!

Thanks so much for joining us again this week. Have some feedback you’d like to share? Leave a note in the comment section below!

If you enjoyed this episode, please share it using the social media buttons you see at the top of the post.

Also, please leave an honest review for The AoL Podcast on iTunes! Ratings and reviews are extremely helpful and greatly appreciated! They do matter in the rankings of the show, and we read each and every one of them.

If you have any questions feel free to email them over via the email mentioned in the show or by our contact form.

And finally, don’t forget to subscribe to the show on CastboxiTunesStitcherPodBean, and/or Google Play Music. It’s absolutely free to do so.

A huge thank-you to you guys for joining us!

Cheers!