This blog post contains the transcription of a free virtual Lunch & Learn we hosted in November 2023 titled, “Money Moves: Taking Control of Your Business’ Finances.” You can view all of our upcoming webinars here.
Top Money Tips
Who are the Top Experts to Know?
Tania Pacheco is an experienced accountant and bookkeeper, with over a decade of experience in a variety of industries before breaking away from her corporate career and opening TP Bookkeeping. With a degree from Merrimack College’s Girard School of Business, Tania has fully immersed herself in the world of business. She understands the challenges that entrepreneurs and business owners face first-hand.
Michelle Lucas is a Financial Coach and founder of Wallet Therapy, a virtual financial coaching business. Michelle loves helping individuals, families, and small business owners learn to confidently manage their money and establish long-term healthy relationships with money. She uses her many years of experience supporting her clients with establishing a budget, debt payoff strategies, money mindset, credit repair, and understanding their numbers. She is very passionate about helping others reduce their money stress and learn more about themselves in the process.
Kimberly Duong is the owner of ALOE Bookkeeping, LLC, where she helps small business owners across the US handle their bookkeeping needs. With her attention to detail and achievement-driven mentality, she ensures that small business owners have an accurate and up-to-date picture of their business’s financial health. She helps provide a solid foundation for tracking income and expenses, allowing business owners to manage their cash flow and make strategic business decisions to optimize their operations, reduce costs, and maximize profitability. With meticulous record-keeping and Kimberly’s dedicated guidance, small business owners will be well-prepared for stress-free tax seasons and are free to focus on what they do best-running and growing their businesses.
What’s the First Step Business Owners Should Take When Wanting to Understand Their Money?
Tracking your income and your expenses is the most important thing, even if it’s in Excel or Google Sheets. Don’t let it become just something you’re doing at tax time to scramble because then there’s a higher likelihood you’ll have mistakes. Find a system that works well for you, whatever that is, and stick to it. Separate your business finances from your personal expenses, too.
Have regular money dates because checking on the financial health of your personal life and your business will really help you make the best financial decisions based on certain goals that you have. Creating a budget is important, too. Do your goals align with where your money is going or where you’re telling it to go?
How Can Business Owners Set Their Prices?
What are your goals, and what do you need to survive? Start with that number and work backwards. If you need $5,000 a month to survive, is it five clients paying $1,000 a month? Is it 10 clients paying $500 a month? It’s also more of an art than a science. You need to know what your worth is so you can include things like your experience level, the deliverables for the client, any kind of unique selling points that is unique to your service, etc. You can charge more for that. It also depends on what type of clients you’re serving. Not every vertical has the same budgetary restraints or constraints, so you have to be cognizant of that. Of course, the goal is always to make more than that budget, right?
As entrepreneurs and business owners, imposter syndrome comes in a lot, too. Remember that you can always monitor and adjust it as well. If it’s not really working or if you don’t feel comfortable, you have the power to change that number. Know your worth and add tax.
What Do You Recommend When It Comes Time to Raise Prices?
If you’re starting to get booked up, you can raise your price. If there’s a scope creep, that’s an immediate conversation. When you’re having these conversations with your clients regarding pricing and pricing increases, keep it very professional. Take the emotion out of it. It’s business. If they are a great client, and they value your services, and there’s a rationale behind it, of course, they’re going to totally understand if they’re your vibe. It’s the price of doing business within reason.
How Can Business Owners Optimize Their Money?
Start with really trying to educate yourself on your finances and really understand your cash flow, so what’s coming into your business and what’s going out of your business. It may be time for you to realize that you do need to adjust your pricing or maybe you’re spending a little extra money there.
Have an emergency fund within your business as well to set up a cushion for any anything that could come up any unexpected expenses.
Automate where possible for invoicing. Continue to stay in control and on top of it by having your money dates and checking in.
What Mistakes Do Business Owners Make with Their Money That They Should Avoid?
Neglecting taxes. Put money aside in your business so that come tax time, you’re not freaking out about where to find the money.
Also, don’t pay for things that you shouldn’t be paying for. Be mindful of subscriptions you’re paying for that you’re not using.
Which Tools and Softwares Are Great to Use?
QuickBooks and Xero, two types of accounting software, are very helpful because you can connect to your bank feeds and all of that bank activity would feed directly into the accounting software.
Although these aren’t directly related to money, a time tracker and project management software are very helpful for understanding what you can delegate, ensuring you don’t let any tasks slip through the cracks, and knowing how much time you spend on a project.
What are the Benefits of Working with an Expert Rather Than DIYing?
DIY is the most expensive option because you don’t know what you don’t know and unless you are a bookkeeper or accountant or you know a financial advisor, chances are you’re going to not know what you’re doing well.
A professional is your second set of eyes. It’s their job to be in your numbers weekly, biweekly, monthly, quarterly, etc. There is huge value in that because as the business owner, you are wearing so many different hats. It is likely that you understand the value of having good financial data, but the truth is, you’re focusing on revenue generating activities, which you should.
What Is Some Additional Advice for Someone Getting Started with Their Business Finances?
Create a budget and plan for your money. Learn to understand what your money’s telling you about your business and then ask for help if you need that.
Ask for help probably before you think you need it. Remember that you don’t know what you don’t know and that’s okay. That’s totally normal as you’re growing in your entrepreneurial journey. There’s no shame. You just have to reach out for help when you need it. Always remember that what is in your bank account is only part of the story.
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