The power of mastering your business financials with Lori Moore

The ultimate goal of running a business is to make a profit. Otherwise, it’s just a hobby. And yet, from my experience, most business owners simply aren’t across their business financials. In today’s episode, I chat to my guest, Lori Moore, about how empowered she now feels now that she’s taken that step and learned how to truly understand her business financials, including profitability and cash flow. This episode will inspire you to learn to love your money, so make sure you stick around.

Hello and welcome to The Clare Wood Podcast. This is your weekly dose of all things money to help you intentionally create a profitable business and a life you love. I have the difficult conversations about money so you can make more money within. Each week I share how you can use mindset and the practical foundations of finance to elevate your earnings without sacrificing the things that are important to you because you can and should be making more money.

About Lori and why she joined The Profit Academy: Foundations to learn about her numbers

CLARE:

Welcome to the podcast, Lori. It is fabulous to have you here joining me on the podcast today. Before we dive in and have a bit of a chat about money, about learning how to manage your finances and things in business, would you mind doing a quick intro to yourself and your business? And yeah, let the listeners know who you are and what you do.

LORI:

Awesome, thank you, Clare. So my name is Lori Moore and I run two businesses actually. So I co-own a construction business with my husband, very busy times to be in construction. And I am also a yoga teacher, so I run a yoga business where I teach yoga, weekly yoga here in Brisbane. And I also speak at workshops and events, weaving yogic philosophy into conversations about how we can live our best lives.

CLARE:

I love that. Well, thank you so much for being here to chat all about money today. I know it’s a bit of an uncomfortable topic to talk about, but that’s what this podcast is all about, having the difficult conversations. So you were someone who came into the very first round of my course, the Profit Academy Foundations. And I wanted to start right at the beginning, I guess, if you wouldn’t mind sharing why you decided to come and join the course.

LORI:

So I had seen that you were running a three-day free insight into money leaks and things like that. And that seemed really fascinating to me because even though I run two businesses, the area that I just never feel across is the money, which is crazy because one of the most important areas to be across when you run a business is your money. And so I jumped into those free workshops that you ran and so much of the content resonated with me. And I don’t think I realised until doing those three courses or those three free workshops that I was afraid of money. I don’t think I knew that I had that mindset that I was fearful of money and fearful of knowing the numbers of my business. And when that came into my awareness, when I became aware of that fact, I realised that I needed to jump into the Profit Academy because it’s so vital to understand your money.

And I also think my thought process was that if I joined the Profit Academy and I understood my money better, I’d be less scared of it and of being able to read all of those numbers. And then I would probably feel way more empowered to make decisions in my business that didn’t focus around scarcity, but instead focused around abundance.

CLARE:

And look, this is something that I hear again and again. I would say it’s such an area of business that people aren’t educated about. I come from an accounting background and as I’ve shared openly, and of course sometimes I feel a little bit overwhelmed with it. I spent six years studying accounting so I can imagine how a lot of people of just shy away from this part of their business. And another thing that I see is that a lot of business owners really give away their power in this space to other people. And I know that people like, “Well, I’ve got an accountant.” But firstly, how do you know if they’re not making mistakes, if they’re giving you the correct information? And secondly, unfortunately what I hear a lot is that people’s accountants aren’t giving them all the information that they need.

And I’ve had many clients who were like, “I thought my accountant would tell me about that. And I didn’t know that I’d have a massive tax debt.” And I said, “Well, were you asking them the question?” “No, I didn’t know I needed to.” And that’s sort of what I created this course. It wasn’t to replace your accountant per se, it was just to put business owners in the driver’s seat and say, “Hey, here’s the basics of everything you need to know.” And at the end of the day, this is your money. This is your hard earned money. And I’m glad that the money leaks course resonated with you, the mini training that we did. So you made that leap. When you were considering jumping into the course… So you obviously were doing the three-day challenge.

When you were considering jumping into the course, did you have any reservations or hesitations? What was going through your mind at the time?

Reservations Lori had about joining the course and learning about her financials

LORI:

I think you always have a reservation when joining a course, particularly with someone you’ve never done a course with before, because you’re just not a hundred percent sure if the value’s going to be there. And I do a lot of courses and I finish all of the courses that I do because I look at it like if I’m paying for this course, then I’m going to make sure that I show up so that I get the most out of that, that particular course. My reservations in the beginning, were probably more around, “Is this going to be suitable to me and is it going to relate back to both of my businesses,” which 100% it did. So I have a service based business, but I also have a product based business. And I loved how transferable all of the course knowledge was across both of those businesses.

So my reservations really, you’ve got to take that leap of faith sometimes and you’ve just got to trust in where you’re at and how you feel. And I always take a moment to say, “Okay, intuitively, does this feel like a yes or does this feel like a no?” And this course felt like a yes to me, and so I had to jump in.

CLARE:

Yeah, I love that there’s this theory about decision making and it is that there’s the logical side of your brain and the emotional side of your brain. And when you’re making decisions, it has to feel good in both. So for example, if you are looking at buying a new car and you go, “Okay, yes, it ticks the box, it’s got that many suits,” and then you get in the car and you’re like, “Ugh, feels meh.” And then on the flip side, if you get in a car and you’re like, “God, this is so hot,” but you’re like, “It’s a two seated car and I’ve got two children that won’t fit in this car.” You’re like, “Well,” so I think that we’re making decisions about any big investment. I think it’s important that you check in on both. I love checking in on your intuition, but obviously there’s also that logical side of your brain.

And one of the things that I taught in the course as well is that quick ROI calculator, which is like, “If I’m going to invest a couple of thousand dollars in something, is this going to deliver that money back to me?” So yeah, I love that you share that you feel that fear because I think sometimes people think that the fear goes away. And at the moment, I’m about to launch my book into the world next year, and I know that when I’m looking at all of the options around doing a book tour and all of that, I said to my husband, I’m like, “Oh my gosh.” I’m like, “It’s so much money.” And he turned around with a big grin and he said to me, “It’s always scary investing, isn’t it?” And it was a really great reminder that it doesn’t go away. And maybe that the numbers change, but the fear’s always there. So thank you for sharing that.

LORI:

Yeah, thank you. I think because you grew up, I remember listening to one of your podcasts where you didn’t grow up with a lot of money. I grew up with a mindset that in order to make money, you have to work extremely hard, you have to be the best, you have to work much harder than everybody else. And I think your experience as a child and how your parents viewed money and how money was handled in your household has a really big impact on the decisions that you make later on in life. And if you can recognise that, that might help also to alleviate those fears that you have because you can say, “Well actually is that my fear or is that somebody… is that something that was taught to me around money?”

CLARE:

Yes. I love that. It’s so true, isn’t it? All these… I mean I know that’s delving right into the money mindset side, but it’s very true, isn’t it? The things that we are bought up being told again and again, I know for me it was wasting money was the worst thing in the world. I remember being forced to eat food that I didn’t want because we couldn’t waste anything. And it’s interesting how that sort of slides into your life at every different chapter. I love that you shared that.

Awesome. So let’s talk about after you’ve jumped in. So, when you first started to dive into the Profit Academy Foundations and started to learn, because module one is all about… it’s about the accounting basics and I know that there’s a lot in that first module.

How were you sort of feeling when you started to dive in and learn a little bit more about the fundamentals of accounting and business finance?

What it feels like learning about the basics of business finance and how Lori has far exceeded her targets with the new knowledge

LORI:

I have a phenomenal accountant and I’ve spent a lot of time with my accountant understanding the software that I use for our construction business and also trying to get across the things that are my responsibility. Like you said before, your accountant has a certain responsibility, but you actually are in the driver’s seat 100%. Your accountant is someone who assists you. Your business is your business and it should be your focal point and your money is most likely one of the reasons why you went into business. You wanted to serve a community to make money. And when I jumped into… And I’ve also done a business degree, so I did do Accounting 101. What I loved is that I did have a basic understanding of accounting, but it’s really helpful to go over everything again and to have that refresher. And there was so much in that first module, that module really frightened me, I must be honest.

From the beginning, it was so big and I was thinking, “Oh my god, this is so much. But it was perfect. It was the perfect first module because without that knowledge and without that information, you can’t really move on to the other six modules. And I loved it. I really loved it. It helped solidify a lot of what I already knew and it reminded me of the importance of a lot of things and helped me pull reports from the accounting software that I would never have pulled before and could read them and could understand them. And then was so equipped to understand our financial position. And that particular, that module one led me to believe straight off the bat that I had made the right decision in jumping in.

CLARE:

Yeah, I remember when I was creating it that I said multiple times at the start of the training, I’m like, “This modules a biggie.” It’s a biggie, but you have to know this stuff. And one of the things that I’ve really tried to do inside the course was to make it really simple as well because what I found when I was studying accounting, I didn’t do any accounting in high school. I just studied it straight at university and I found that the lecturers were using such big and complex terms and I was sitting there thinking, “Oh my gosh.” And it was only years later when it all sort of clicked together that I was like, “Why didn’t they make that easier?” And so what I really tried to do in that module was break it down as simply as possible, put it into plain English terms so that while there’s a lot in there, hopefully it’s really easy to understand and you don’t feel like you’re getting bombarded with all these accounting gobbly goop terms.

LORI:

No, that was really good because even though there was a lot of content, I certainly didn’t feel overwhelmed.

CLARE:

And that was me trying to take what I’ve learned in six years of accounting and compress it into… trying to remove all of the things that you probably don’t need as a small business owner and just really focus in on, “Here’s the key terminology, metrics, things that you need to know to make the rest of the program make sense.” So, that was your first experience. You were probably a bit like, “Whoa, this is a lot,” but hopefully you weren’t feeling too warmed to go, “Okay, cool. I’m feeling a bit more empowered around all of this.”

LORI:

And the work workbook helps as well. Having that you’ve got a workbook that you can write stuff in as well. And that was really in each of the modules and that was really helpful.

CLARE:

Yeah. And then moving through the rest of the program… Sorry, the rest of the course is isn’t quite as intense. It’s a lot more practical and focused on the business. What were some of the key takeaways that you had going through the rest of the modules?

LORI:

So I’ve done a household budget, but I’ve never done a budget for either of the businesses. That was a huge eye-opening moment for me and truly terrifying because I was thinking, “Oh my goodness, I’m going to put in big numbers here and we’re never going to hit them.” Now I want to just say straight away that we are 17th of November and we are midway through the month of November, and I’ve already blown through both of the targets that I set for November, which is crazy.

CLARE:

Wow.

LORI:

It goes to show one of two things. First and foremost, I budgeted too low and I budgeted too low because I didn’t know my numbers. And so when I redo the budget again, I’m going to be so empowered because I am so across the numbers now. I know, “Hey, we can do way more than this. We can really strive for bigger goals.” The other key takeaway that I had was that my husband and I are in a way stronger financial position than I realised. And whether or not this is because I’m across the numbers now and I can see the money that’s coming in, I can see the money that’s going out and I understand it better. I just feel like we actually are making more money. So I don’t know if that’s true because I wasn’t necessarily across the numbers as well as I was before.

But I have no concerns now about making purchases or investing in either of the businesses. I feel so much more relaxed around even household purchases because I know where our money is, I know what money’s coming in. The cash flow forecast was also incredible. Every single Monday, I sit down and I chat to my husband about what we’ve got coming in and I’m so across all of the client work as well, much more than I have ever been before. And that’s been a wonderful takeaway from the course because that was really why I joined. I was worried that our financial position wasn’t as strong as it actually is and you’ve given me peace of mind.

CLARE:

So this is interesting because I find that when people dive into their money, either one of two things happen. And this actually happens quite a lot of the time. I’d say about half of the people, they’re like, “Oh, it’s actually not as bad as I thought.” And sometimes people are, “I’m actually kicking ass here.” So, that’s definitely a really positive thing that can happen. The flip side of that, sometimes people dive in and they’re like, “Whoa, this is not great.” And the thing that I remind people that do sort of fall into that bucket is I’m like, “Well, it was not great whether you knew it or not. And at least now, rather than ending up in a place where you have a massive tax debt or you can’t afford to pay your bills, at least now you know what’s going on and you can start to be in the driver’s seat when it comes to making positive steps moving forward.”

So I’m really glad that you had that experience. And the thing that I often find too is that when people are empowered with that knowledge, you will be able to grow your business faster. Because when you say, “Let’s hire the new team member, do the thing,” you actually know, “I’ve got the money there to do that.” Whereas, what I see sometimes is that people hold themselves back because they’re freaking out. They’re like, “Oh my gosh, I don’t even know if I can afford this thing.” And so they aren’t making those investments. So hopefully having that knowledge, you now can actually start to grow the businesses a lot faster within ten because you say, “Hey, we can actually afford to do the thing that you are weighing up.” So, that’s really cool.

The second thing that you touched on there was the cash flow forecast. So this is something… It doesn’t sound sexy. When you talk about a cashflow forecast, people like, “Sounds like a spreadsheet.” It is a spreadsheet, let’s be honest. But the thing that you said there is that… maybe talk a little bit about what it’s meant to you and why you enjoy doing the cash flow forecast process.

How cashflow forecasting has changed Lori’s business and personal financials for the better (and reduces business overwhelm!)

LORI:

Because then I’m just across the money that’s coming into the business and I’m setting expectations every single week, at the very beginning of the week on what we’ve got coming in and what we’ve got going out. And just being able to see that in a really simplistic Excel spreadsheet provides me with so much empowerment in knowing what we’ve got coming up. And the cash flow forecast, you do it every single week, but you’ve also, you’re always a few weeks ahead as well. And that is how I would like to run my business. I want to know three to four weeks ahead what we’ve got coming in, what we’ve got going out so that I can be prepared. So if I need to move money around or if I need to be filling up the tax savings more, and it’s not just even in the businesses, I’m now doing it in the household budget as well.

So it transfers across into your personal life, which is so important for your peace of mind. If you know what money you’ve got coming in and you know what money you’ve got going out, you can organise your entire life with so much more knowledge and power. And when you run a small business, usually your income is from your business. When you work for somebody else, you go, “Well, I know I’m going to get paid X amount of dollars every single week.” But when you’re running a small business, every week may not be the exact same dollar amount that you’ve got coming in. So you need to be across that. And also, one of the things that you said in the course was that if you look at your week ahead and you go, “Wow, I’ve actually got a lot of expenses and I don’t actually have a lot of income coming in, what can I do to change that now?”

No point waiting till the end of the month and going, “Wow, I had a really bad month. I didn’t make as much money as I thought.” You can make that empowered decision at the very beginning of every single week. “I need to bring a new client on board. I need to… For me, maybe I need to run another class or I need to find another private client and say to my husband, ‘What quotes do we have coming up? Who can I move into invoice stage?'” Without that visual every single Monday, I wouldn’t be doing that.

CLARE:

Yeah. And that’s exactly what this process is all about. It’s exact same process that I used to use when I worked in big corporate firms. And I think that people think, “When I get to a certain stage, I won’t have to worry about this.” But something that I remind people, businesses go up and down. The economy grows up and down and cashflow is one of the biggest things that can destroy a business, a lack of cash flow. And even if you’ve got a really profitable business, and this is what a lot of people don’t understand is profit is different to cash flow. Cash flow, because you can have a business that made… I’ll use my husband’s business for example. So he’s a recruiter and he can make a sale, and what happens is that he won’t get that money straight away. So even though it shows up as a profit in a particular month, what happens with recruitment is that someone has to give their notice and then they have to start and then he won’t get paid until potentially the end of that month.

So sometimes it’s two months later before he gets that money. And this is what cash flow is, it’s different to profit. It’s actually, “Do I have enough money in my bank account to pay my bills?” So I love that you are using that and please continue to stick with it. I have a client of mine that I worked with years and years ago and she told me, she goes, “To this day, I still use that process.” And she said, “It’s so, so helpful because I always know what’s coming in, what’s going out.” And just being able to make those decisions, being able to say, “Hey, maybe I need to push that out.” I know I’ve had examples in my own business where I’ve said, “I’m going to have to push that photo shoot out,” or “I’m going to have to delay that project.” And it actually feels great being able to do that rather than getting somewhere being like, “How the hell do I pay that invoice?”

LORI:

Well, that’s it. And you’re proactive.

CLARE:

Yeah, yeah.

LORI:

You’ve always got eyes on your business. And I think the other thing as well is I probably wasn’t really aware that I was doing this, but I think I was coming to every new client coming into my yoga business or every new private client with this little bit of fear like, “Oh, I really want to serve this person well. I hope they like me, and the additional income would be amazing as well.” But there was always this sort of concern about the money side lingering in the background where when I’m serving a client and I imagine that you are the same, you really want your full attention to be on the experience that that client is having with you. And now that I have the cash flow forecast, I worry about my money Monday morning for 30 minutes and I do not think about it again.

CLARE:

Yeah, I love that. Yeah. And you can just be present and be serving and yeah. Yeah, a hundred percent. I know one of the things that we spoke about in the course as well was about talking about different payment methods and how to make sure that you’re not ending up in a situation where people aren’t paying you because that’s something that was very real that happens in business. We also sort of started to dive a little bit into mindset because I know that yourself and a couple of other people spoke about, “Well, people won’t want to do that,” or, “How do I have that conversation without making someone be like, ‘I don’t want to pay in advance.'” So yeah, it’s really cool to be looking at your numbers and be able to not have to stress about it when you’re there with your clients.

LORI:

And you do feel, I think, when you’re not across your money, you do feel awkward about having those money conversations because you don’t want the other person to think that you’re really scrambling for cash or, which is not at all the case. One of my clients would always pay me in arrears, and you encouraged me to get that payment in advance. And when I spoke to the client about that, I said, “Look, I’m now going to be charging in advance for these yoga classes that I’m teaching.” There was no upset from the client, he wasn’t disgruntled by that comment. He was like, “Yeah, well we pay everybody else in advance.” I was like, “Oh my goodness. Oh, this is unbelievable.” And once you’re across your money and you don’t have the fear, you just don’t feel awkward about talking about money anymore either. You sort of go, “Well, I am providing a service and it’s a fantastic service and these are my payment terms.”

CLARE:

Yeah, exactly. I think the more and more that you do this and that you talk about money and that you feel in the driver’s seat and you can go, “Wow, okay, this is a way that I can do things,” then yeah, it gets easier with time.

LORI:

It definitely does. And doing the course the way that we did it, week on week on week, you’re learning a new skill set every single week and you’re just feeling more and more in the driver’s seat.

CLARE:

Oh, well I’m pleased to hear. That’s exactly what we were aiming for. The last bit of the Profit Academy Foundations that we delved into, and I had to put this module in there because it’s my favorite part of business, which is helping people make more money. And I armed denied about, “Does this belong in this course or not?” But the program’s called the Profit Academy, and I wanted to close the course out with the module. “Okay, you’ve done all the work, you get the finances, here’s how you actually make more money.” And one of the bonuses that I have is 50 revenue boosters. It’s 50 ideas for how you can make more money in your business. I’d love for you to share, did you have any a-has in the last module in module seven about how to actually make more profit or drive more revenue in your business?

LORI:

I loved that revenue booster and I’m actually using that to help guide my 2023 goals.

CLARE:

Oh yay.

LORI:

Yeah. I really loved that. I enjoyed… Because we did the course closer to the end of the year, I’m starting to slow down both of the businesses. But it’s giving me the opportunity to really dive into that handout and that module and look into 2023 and how we can start to boost the revenue for both of the businesses. Because the content that’s provided in the course is there’s so much and every week you’re doing this, and then you’re doing the next thing and you’re building on it. It’s fantastic. And you want to do it that way because you’re getting across your numbers. Once you’re across your numbers and you’re starting to implement all of the things that you need to do on a weekly basis and on a monthly basis, once you’ve got all that down, you can start to look into, “Right, how do I increase that revenue?”

And just as I was saying before with the cash flow forecast, if I was looking at the cash flow forecasting going, “Oh my goodness, we really need a boost of income.” Which for us right now we don’t, which is amazing. What a fantastic position to be in. But I wouldn’t have known that without doing the course so I’m so grateful. But you can grab that, the 50 revenue and go, “Right, which one of these am I going to do this week and see if it works for me?” And that’s definitely something I’m going to be doing in 2023 because I want to start to build the yoga business up a little bit more, but in ways that feel more authentic to me. I love doing the workshops. I love being hired by companies to come in and talk to families or to employees about yoga and mindfulness. I love the speaking engagements. I don’t necessarily want to run more weekly classes.

And so there was just so many tips in that revenue booster that tie into increasing your revenue in a way that feels authentic and right for you and your business. There was so many great handouts in this course. So many. It really was, there was so much value. I’m very grateful that I did it. And I would definitely recommend anybody else who is fearful about their money to jump on board because you will come out the other end fit with a completely different mindset.

CLARE:

Oh, well, I’m so, so pleased. This was exactly my intent when I created it. I wanted to empower business owners. And I also wanted, not just that you become great with your numbers and your money, but that you could go, “I’m in the driver’s seat. I can make a ton more money.” And I know even by the end of the program, we had people inside saying, “I’ve added a couple of thousand dollars even just in the last couple of weeks.” Someone spoke about how they’ve added $50,000 into their business and through coming up with new ways to add more revenue. And that just excites me so, so much.

I wanted to say a massive, massive thank you for coming on the podcast and sharing your experience inside. If anyone is loving your vibe and would like to connect, what’s the best way that they can connect with you?

LORI:

So you can jump onto my website, www.samanawellbeing.com.au. I teach weekly yoga classes in North Brisbane. And my Instagram handle is @lifewithlori_ so I would love to hear from anybody, and if anybody is interested in having someone come into their organisation and talk about mindfulness and yoga and how to embrace life’s ups and downs, please get in contact with me.

CLARE:

Yeah, I love that. I’ll put all of those links in the show notes for today’s episode. So if you do want to connect with Lori, you can reach out to her through the show notes. Thank you so much for coming on, and thank you for tuning in to today’s episode of the podcast. If you would like to join the Profit Academy Foundations, there will of course be a link in the show notes as well. So make sure you go and check that out if you are ready to step into the driver’s seat when it comes to your money. Thanks so much for listening and I look forward to chatting to you again next week.

I hope you are feeling inspired and excited about what is possible for you when it comes to money. It takes a lot of time and energy to create a podcast, so I’d be very grateful if you could take the time to hit subscribe, write me a review and share any of your favorite episodes with your audience on social media. The more people that we can reach, the more people we can empower to earn more in their business because you can and should be earning more money.