Fix your Finances (Part 2): Cashflow and powerful planning

* Transcript created by AI – may contain errors or omissions from original podcast audio

Welcome back to day two of this special mini series fix Your Finances.

If your Business is Making Sales but your bank balance isn’t quite reflecting that it’s time to talk profit leaks. Today I’m gonna show you how to plug those sneaky dreams on your income and spoiler. You probably have at least three to five ways that money is leaking out of your bank account that you don’t even know about.

And secondly, I’m gonna teach you how to track the two most important numbers to get your cashflow under control for good.

Grab a pen, grab your cup of tea, because today’s episode is gonna be a big one.

 Yesterday I spoke to you about profit. Today we are going to talk about a metric that a lot of business owners forget about, which is called cashflow. So what exactly is cashflow? Cashflow is about the inflow and outflow of cash.

And cash is different to when revenue is recognized. And again, I go deeper into this inside the program, but at a glance, the difference is is that you earn revenue at the time that, um, a deal is done or a contract is signed, but the cash might not hit your bank account right away. So let me share an example.

My husband runs a recruitment firm, and with recruitment he will often like. Sign a contract. Some, you know, someone says, yes, I’ll take the job. Excellent. The deal’s done. So the revenue gets recognized when he does the deal, but sometimes he doesn’t get the cash till like up to six weeks later because the person might need to give their notice to leave the job.

Um, they might not have a start date straight away. And this might be relevant to your business as well. Maybe you do launches. Maybe you have quite lumpy cash flow in your business. And so even though you look at your report and it might say you’ve made a profit and you’re like, where’s all my fricking money, then that’s because cash flow is a different metric to profit, and it’s important because your business might be profitable.

And yet you are still struggling to pay your bills on time. Or alternatively, your business might not be showing an on paper loss and you’re like, I’ve got cash here. And it’s simply a timing matter. So these two need to be considered, um, together. The cool thing about cashflow is that when you start broadcasting your cashflow, you are actually looking forward and seeing will you have enough cash at a point in time so that you know that you can pay your bills.

So here is the two number cash flow formula. What we are looking at is the timing of the cash inflows versus the timing of the cash outflows and what that then leaves us. So we put an opening balance of cash, so we go and have a look at how much money have I got at the moment. We then go, what’s coming in, what’s going out and when?

And then what is our closing balance of cash and what this does. Is it empowers you to have confidence and clarity around whether you have the capacity to pay your bills on time. Let me show you in the next bit here what this actually looks like. So when we forecast cash, all the way, at least that I teach it, is that we forecast on a week to week basis.

And what we are doing is having a look at what is flowing into the bank account and the timing of that. And similarly with the outflow, we we’re having a look at what’s Bill do I have due and when’s it due? And then we recognize that in the week that it’s going out. The cool thing about this is that we are looking forward in our business and we have a really clear handle on what this looks like for the coming weeks.

Now, you might think, well, what are we doing with this information? What you are doing is that you are then empowered to make decisions to increase your cash flow. So let me share an example. When I was, um, doing my cashflow, uh, many years ago, um, I had in my forecast to do a photo shoot. And if you’ve seen my photos on Instagram, I don’t do my photo shoots by half.

I, I go and hire a beautiful house. I hire a really beautiful photographer. I get an assistant, you know, I get clothes. I do the whole shebang because I want to go capture a ton of content. If I’m going and doing this, I wanna make sure that I’ve got a ton of content, so I take all different outfits, I wanna make sure that I’ve got someone with me so that they are, you know, keeping the, the shoot ticking along.

And it costs quite a bit of money. I’m gonna be honest the way that I do it. But I only do one photo shoot a year and I do it very well. And so anyway, like I said, it costs me quite a bit of money the way that I do photo shoot. So at this particular point in time, I was looking forward at my cashflow forecast and I had this big lump of money in there for my photo shoot, and I was looking at my inflows and looking at that timing of my outflows, and I thought, this is not the right time to be doing a photo shoot.

Um, you know, I, I don’t, I didn’t wanna trim back on the way that I did it because I, I love the way that I do my shoots. I didn’t wanna sort of. Cut corners on that. So what I made the decision to do was to delay the timing of when I was gonna do the photo shoot. There are a ton of other strategies that you can also use to move around the timing of your inflows and your outflows.

I go a lot deeper into these inside foundations. Of course, I share a ton of different strategies, but another thing that you can do at a glance is that if you’re looking forward and you’re saying, oh my goodness, I’m gonna run out of cash, you can create cash injections. So you might go, what’s something cool that I can put into my sales forecast to bring in some cash rather quickly?

Now something that I find is that a lot of business owners don’t actually have control of the levers inside their business. Like when I say that, they’re like, I don’t even know what I would do. And again, that’s why in the program I’ve got 50 revenue boosters. I have a ton of ideas, so that if you do get to a position like this and you think.

I don’t even know what to do to bring in more money. You’ve got some levers. You’ve got some tools that you can pull. You’ve got some strategies that you can put in place so that you can get that cash injection and keep you cash positive. This is really different to the way that a lot of business owners work because they kind of do this in reverse, and maybe you can relate to this.

What happens when you do this in reverse is that you get to a point in time and you go to pay a bill and you think, oh my gosh, I’ve got no money. You panic, and then you are doing a desperate grab for cash at that point in time. What we are doing with our cashflow forecast is we are looking into the future.

For eight to 12 weeks, so months in advance, and we are identifying the points where cash might be tight. We are looking forward and saying, okay, I’ve got a tax bill due. Then rather than wait until that lands in my inbox, have a complete panic and not be able to pay it, I’m gonna come up with a strategy now.

So that I’m gonna have the cash in advance this tool. Is will completely transform the way that you do business. And I know this because it’s transformed the way that I do my business and it’s transformed the way that my clients and my students do business. I’ve had clients of mine from five, six years ago say to me, I still do my cash cashflow forecast every Monday morning using that exact template and framework that you send me.

It really is a game changer.

The next thing that I really wanna talk about today is a budget. Now, on the face of it, a budget doesn’t sound super sexy, but a budget will add dollars to your bottom line. So let’s talk about why most business owners. Don’t have a budget or a business, a money plan in place. And the answer that I hear again and again, like, I’m like, why don’t you have a budget other following?

The first thing I hear is, I don’t have time. I’m too busy. I don’t have time to do it. Again. This is why I’ve created this, this template. This framework is to make it easy for you so that you stop for procrastinating on it and you actually get this process done. The next thing that I hear is that it’s confusing or that you don’t know what to do.

And again, this is why I love to teach this strategy. I love to teach how to actually build your budget, because when you know how it’s actually not that hard. And I even have a little cheat method that I teach, which is like, Hey, if you don’t wanna go and do a full blown budget, here’s just a way that you can get some of the top line numbers in there so that at least you have some sort of guideposts for creating the results that you want.

The next answer that I hear about why you might not have a budget or a money plan is that you don’t see the point. You are like, what’s the point? My numbers are gonna be what they’re gonna be, I can’t change it anyway. What’s the point in putting a plan in place? Well, let me tell you, I’ve worked for a lot of big corporate organizations and they all do a budget.

Big companies know that budgets work. And yet a lot of small business owners think it’s not relevant to me. It doesn’t relate to me. I don’t need to worry about it. Having a budget has the capacity to completely change your business model, and that is why you wanna have one in place. And the last reason why a lot of business owners don’t create a budget, maybe this is you, is because you think you have to be some sort of maths genius to be able to build a budget.

But the reality is it’s actually, again, it’s not that hard when you know what you’re doing. Inside foundations, the template that I’ve built, it’s got all the formulas in there. Like you don’t have to be starting from scratch trying to figure out how to pull together a spreadsheet. You’ve got a template and you just plug the numbers in.

So what exactly is a budget or what’s the strategy that I use when creating a budget for most business owners? I believe a 12 month plan is sufficient for most business owners, and the way that I do it is we do a month by month plan to heal profit goals. So essentially what we are doing is we’re forecasting on a monthly basis what are my sales gonna be each month, and what are my expenses gonna be each month, and what will that leave me in terms of a profit or a loss at the end of each month.

And also, you can then use this tool to forecast how much tax you’re going to have to pay each month. Now a lot of big companies that I’ve worked for, we used to do five year budgets, 10 year plans. You know, you by all means you can do that, but I think that for small business owners, we’re a lot more nimble.

I think that doing a 12 month plan, particularly from a starting point, is a really fantastic place to start. But we do wanna break it down into month by month. Here’s the cool thing about your budget. It’s actually a framework of how to hit the profit that you want. Because when you’ve got your money plan, when you’ve got your budget in place, firstly you have a plan for your goals.

Because something that I’ve noticed, I spoke about this yesterday, is that a lot of business owners say, I wanna make a million dollars a year without actually working out. Well. How are you actually intending to get there? A big mistake that I see a lot of business owners make is thinking that they can grow their revenue without investing any more money.

So they’re like, I wanna make more money and I’m not gonna spend a cent more. And unfortunately as they get into the growth cycle, they start to realize like, when you have more clients, a lot of times you’re gonna need more support. Even if you have a fully scalable product, like a digital product, a membership, you are gonna need extra customer support.

You are gonna need more tech help you during your launches. You’re gonna need a lot more support because the more clients that you have, the more people that you are serving, the more support that you are gonna need. You likely need to invest in maybe mentorship or, um, more systemization. The cost of your actual systems goes up as you have more people inside your programs.

So when you are doing your budget, you’re actually looking and saying, okay, if I wanna get there, I’m gonna need to hire a new person here. I’m going to need to invest in a social media manager. I’m gonna need to set up some Facebook ads, whatever that might look like. So your budget is actually your roadmap.

To get to the goals that you wanna achieve, and as I said earlier, it will also help you get clear around how much profit or loss am I gonna make each month, and how much am I gonna have to actually pay the tax man if I’m earning that much money. The reason this is so important is because the ultimate goal for you in business is to make more profit so that you can create more freedom in your life.

Yes, we are passionate about the work that we do. I’m sure you can tell I’m very passionate about the work that I do. I’m sure you’re really passionate about the work that you are doing too. But at the end of the day, we aren’t running a charity. We are here to make money. And your money plan, your budget will help you do that.

So how exactly does it help you make more money? Firstly, by setting yourself sales targets each month by actually giving yourself a goal that you wanna hit. If anyone has ever done sales tracking before or if you’ve ever, um, done goal setting, I blow my own mind when I actually sit and map out my goals.

Sometimes I don’t always hit them in the first year, but when I look back a couple of years later, I really do blow my mind and think, wow, I’ve done that. Tick, tick, tick. Those were all big goals of mine and they are all my new normal, because when you put pen to paper, it makes it more real. It actually tells you the tangible thing that you are working towards.

So when you set yourself a budget, you are actually setting yourself sales targets for each month, and what you then do is you track your performance against those targets, giving yourself accountability. So when I was in corporate land, we would have our sales team. Um, I was working as a commercial manager, which is quite similar to what I do now actually.

Um, it’s kind of like a business coach for big companies. Uh, and our sales team would come and they’d say, I’ve missed my sales target. And we’d be like, okay, well what are you gonna do to get back on track towards the sales goals for the year? Keeping you accountable to these goals that you signed up for.

I always reminded the sales team of that. I’d be like, you set these sales targets. Obviously we worked together with the finance team and the sales team, but I’m like, Hey, you signed up on these, so what are we gonna do? Let’s get you there. Your budget is your, your, the thing that you’re working towards.

And when you sit down and track your performance against your plan each month, you’ve got that accountability there.

The next thing that your budget helps you to do is to control your expenses because. When you’re running a business, there’s a lot of tempting things to go and spend money on all the time. There’s courses that pop up you, you know, you might be watching something online. You think, oh my gosh, that’s exactly what I need.

I need to be running Facebook cards. Oh my gosh, I need new website. I need to do a new photo shoot. You are always getting called to do all of these new things, and when you have your plan in place, it helps you to control your expenses. Because if you suddenly go, I’m gonna do a photo shoot, you go and look at your plan and you’re like, do you know what?

We hadn’t actually budgeted for a photo shoot this year. When you are hiring a new person for your team and you had put in your budget that you wanted to pay someone $50,000 a year, and you find someone who’s amazing and they’re $80,000 a year, you can actually say, Hmm, that wasn’t in the plan. Now your budget isn’t designed to be restrictive.

It’s designed to be your guideline. They’re designed to be your guideposts. So let me share, even though I have my budget and I’ve got my game plan, I, I’m not gonna pretend that I never spend money outside of my budget because I do. But what I do is that when I’m looking at investments, I’m looking at it in context of the profitability that targets that I wanna hit.

So, for example, if I am making more money than I had planned, I might then say, do you know what? I can actually afford to invest in this retreat because I’m actually making more money than I had planned, and I’m gonna reward myself by going on a beautiful retreat. I actually can invest in the premium team member.

Because I’m actually making more than I had planned. So this is what your budget’s doing. It’s not restrictive, it’s empowering. It’s your guidelines to stop you from overspending and to make sure that you are on track to those sales targets that you set yourself each month. Now what I wanna show you next is a really cool little tool that I think is really fun.

My, my clients and my students love this. I wanted to share it with you already. It’s something I teach inside the program, but I wanted to pop it in here in the challenge. This here is a simple but powerful visual tool to CR drive bigger sales months. Now if you are listening to this, what we are looking at here is some visual representations of how you can work towards your goal.

I have a picture of a pyramid, I have a picture of a thermometer, and I also have some beautiful little, they’re actually just flowers in a pot. And the way that we use, you know, you can pick whatever visual tool you want. The way that we use a visual tool is that essentially the coloring in the entirety of it represents that you have hit your goal.

So, for example, if you’ve set yourself a goal of $20,000 sales for the month, when sales come in, you color in your image, your visual representation, bit by bit as the sales come in. So that when you are at the $10,000 mark, half of your graph, your drawing is colored in. Now I’m not a super creative person.

I’m an accountant. Um, I’m not a big visual person, so I just draw a simple pyramid. I love that for me. But I do have a lot of creative clients and students of mine, and they love to, you know, draw a beautiful, uh, a beautiful visual representation of what they want their goal to look like, and then they color it in bit by bit.

The image we’re looking at here has got all these leaves leading up to a flower in a pot, and each leaf can represent, you know, a thousand dollars coming in. And when it comes in, you color in the leaf and you keep working towards having the whole beautiful image colored in and saying, oh my goodness, I hit my goal.

What, why this works is because you have a visual representation. Yes, you’re probably tracking your sales. If you’re not, you should be. Um, but to visually look at it each day and say, oh my gosh, I’m already halfway towards my goal for the month. Okay, what can I do to close this gap? It is driving momentum, and what this is doing is it’s making you way more likely to stay focused, to push harder.

To keep your eyes on the prize. I also use the coloring in of this tool as a beautiful little gratitude and manifestation tool. So as sales come in, I do a thing where I close down my eyes, I color it in, and I say a big thank you. I name the person, so I say, thank you so much, Jessica, for your payment. I’m so grateful that you’ve chosen to invest with me, and I also put a little representation on the back as well.

I say I trust that this investment will come back to you tenfold, and that just feels really beautiful and aligned for me to send a really good energetic intention to that person. I know that people invest with me to earn more money, but maybe they invest with you for a different reason. So maybe you are a, a stylist and someone that hires you and you can send a beautiful little light.

Thank you so much for choosing to invest to work with me. I trust this new wardrobe will help you feel more confident. Empowered and bring you so much joy every day. It’ll feel magnetic and energized. Every time you wear some of these new clothes. See how you can put a really lovely intention around it?

Send it to your, your clients and to say thank you. It’s really cool having a visual tour because it creates a little dopamine hit. Every time you color in another block. I love it. I, I love, I’m like, oh my gosh, someone else has come into my world. I’m so excited for them, and of course I’m so excited for me.

So, in summary, there are two numbers that every smart business owner should obsess over. Firstly is cashflow, and secondly is profit. If you miss these, you are basically flying blind with a blindfold and no seat belt. So your budget isn’t some boring spreadsheet or nice to have plan. It’s your profit making strategy in disguise.

It’s a map to more money in your bank account. And yes, that Dream holiday, new hire or luxury business class upgrade, it starts with knowing your numbers. If you can see the transformative effect that knowing your numbers can have and how it can help you make more actual money, I’d love to invite you in to the Profit Academy Foundations because foundations is the comprehensive framework to know your numbers and grow your numbers.

You’ll learn how to master your business, finances, and scale your profit. But don’t take my word for it. Let me tell you what some of my students in foundations have said. Someone has said, I used to stress about money and now I don’t give it a second thought. Someone else said, this course lit a fire under my booty.

And now one of my all time favorite things to do every morning is jump into my account, reconcile my attraction, my transactions, and check out my monthly progress to see how I’m tracking. Leah said, I completed my cashflow forecast, and I can honestly say this has made me feel so much more confident and comfortable with my finances coming into my down period.

Thank you for creating this. I feel so effing good about my numbers right now. My gosh, it feels so good to be coming at the other side of that finance fog. Um, another testimonial I had here was actually from a bookkeeper and she said, I know I’m a bookkeeper and be all should be all over it, but I wasn’t.

This has given me the kick up the butt to get better at my money stuff. I highly recommend it if you’re a service-based business with or without a bookkeeper wanting to grow your numbers, but especially grow your profit. Claire knows her stuff and delivers it in such a personable way. Um, I’ve also had client, uh, students, you know, one student here has grown her profit by 20%.

Another student here is actually doing the bass and daily targets. Another one there said, I, you’ve been able to explain it better in one hour. Then our accountant or bookkeeper have been able to explain it in years. Another testimonial here says, being a business owner is something I’ve always wanted to sort out, and now I’ve put my big girl pants on and I’m actually owning my business finances.

So this early bird offer of 300 US dollars, approximately 500 Australian dollars disappears in two days. If you have wanted to work on your numbers, if you’ve wanted to work on your finances. This is the time to jump on in. I’m gonna pop the link in the. Chat box here, and also I’ll be sending it to you.

So keep an eye on your inbox if you wanna jump on him. And don’t forget about these bonuses that we spoke about yesterday. We’ve got the Live master class with Latitude Accountants, 10 hacks. To reduce your tax, we’ve got the Live Masterclass, AI and your business finances. With me. I’m teaching you what tech is gonna look like in this space, how AI is gonna help transform the world of business finances.

You’ve got the quick start guides, so I’m teaching you how to actually use Xero, how to actually use Excel. Te TE teaching you the basics so that you know what you’re actually looking at. The Bookkeeper Success Framework, the Ultimate Accountant Hiring Guide, and the Return on Investment calculator, six epic bonuses and that huge early bird offer of nearly 500 Australian dollars off, but it is disappearing very soon.

Thank you so much for joining me. Please join me again tomorrow because in the final day we are going through the 15 minute finance formula. This is the exact weekly routine that will keep you on top of your money without you drowning in spreadsheets.

 If what you’ve learned today has you thinking. Why the hell didn’t anyone teach me this stuff sooner? You are gonna love what’s inside the Profit Academy Foundations. This little three day mini training is just a teaser of the university that is inside this program. This course is your full financial transformation system.

 Inside, you’ll learn how to actually create your own cashflow forecast. We’ll be going deep in how to analyze your financials. You’ll learn how to pull together a budget, and you’ll learn for once and for all how to finally understand what the hell it is your accountant is talking about in those meetings.

 And my favorite module inside the program. Is the module where you actually learn how to make more profit as well. If this is speaking to you, if you are ready to jump on in, make sure you jump on in during the early bird window, because this early bird discount and these bonuses are vanishing very soon you get the massive discount. 500 Australian dollars, 300 US dollars off the course price. You get the seven live coaching calls with me, so seven live q and a sessions, 60 minute sessions with me, and there is all the training material inside seven modules plus the six exclusive bonuses as I mentioned yesterday. There’s the accountant hiring guide, the bookkeeper success framework, the AI training, the 10 ways to save tax and a ton more.

 But these are disappearing soon.  So if you are ready to feel in control of your money, now is the time. The link to join Foundations is in the show. Note for today’s episode, I hope to see you inside, and this can be the start of changing your relationship with money for once and for all.

* Transcript created by AI – may contain errors or omissions from original podcast audio