Speaker 1: 0:00

With over a decade of working with entrepreneurs and their money, chelsea Williams has come to understand that it's always and never about money. So she's on a mission to splash some color around this very black and white topic. School never taught us about money, yet we use it every day, and financial clarity can be the thing that shatters glass ceilings. Let's dive in. Welcome to the Buzzworthy Marketing Show. Welcome to the show Chelsea Calling in from a recent hometown of mine Bloomington Normal, illinois. Why is it that there are two names to this one town and it's such a small town?

Speaker 2: 0:53

I'm sure there's a story behind it. The best I can tell you is they're only separated by one road. You don't know when you're in one and out of the other.

Speaker 1: 1:02

Gotcha, it is so funny. Okay, yeah, that makes more sense. So how are you doing today?

Speaker 2: 1:06

I'm fabulous. I'm happy to be here with you.

Speaker 1: 1:09

Awesome, that's great, and so, as I was saying in my intro for you, I love how you're attacking what is really one of the fundamental issues with our education right now, which is the lack of talk about finance, and it's in a free market, how. That is not the core or one of the core of what we talk about in bringing up our kids. What? Where's the disconnect there?

Speaker 2: 1:45

bringing up our kids? What? Where's the disconnect there? Yeah, you know it's.

Speaker 2: 1:54

It's a funny story how I came to start with that, with the idea that financial literacy is not happening. It took me a few years in my career to like really look back on my life and think about that. And one of the stories I tell that is perfect proof of we are not taught financial literacy. Our parents were not taught. Therefore they cannot pass it to us. But the story of when I was a freshman in high school, me and my friend were on a city bus going to the mall to spend our allowance and on our way back we sat right behind the bus driver and all of a sudden he's like get your notebooks out, girls, I'm going to have you write some stuff down. And he walked us through a budget Like my first money lesson. I didn't realize it at the time. It became a big story later in life. Like the first time anybody sat me down and even explained to me what a budget was or how to even write it out, was a city bus driver Like that's who taught me.

Speaker 2: 2:46

And so, looking back now after working with all of these entrepreneurs cause that sounds like big and fancy, right, like I'm a CFO, I help businesses manage all this cashflow and all these numbers and reporting and profitability, but what it really boils down to is I'm helping a business owner manage money in a business container, but that, how they manage that business money container, is the same way they're managing their personal finance.

Speaker 1: 3:13

Oh right, I totally agree with that. They uh it's funny because you know, I was in business for about 13 years, uh, before I ran across a book called, and I went to college and studied entrepreneurship. You know, there's only like two classes on finance and it's on corporate finance, which does not translate to the small and medium-sized businesses.

Speaker 1: 3:37

It's irrelevant, right. We're all cash-based. They're talking about accrual. We're like I don't get it, and then the EBITDA and all the other stuff that we don't care about. We're just trying to run a business, right? But I ran across this book by Mike McCall. It's called Profit First. Are you familiar with that one?

Speaker 2: 3:52

I will do you one better. You actually help businesses and people incorporate the systems in this book. I love it. I'm so happy to hear you know it.

Speaker 1: 4:04

Oh, yes, me and Michael have now, since then, have become friends. He's been on the show on my other podcast, the buzzworthy marketing show, a couple of times, and actually he was supposed to be on my show yesterday but my office and my studio where it was without power for over six hours and so we missed each other yesterday. So he's always a pleasure to talk to.

Speaker 2: 4:24

He's such a great read.

Speaker 1: 4:27

Yes, and it changed my life and when you said it, the way that you you look at your business finances is how you look at your personal finances is so true, because it changed how I saw business. I grew a multi seven figure creative agency broke. Basically it was functioning, but it was broke right. It could have kept going for many years and I would have been just another one of those people in, as Mike says, entrepreneurial poverty, something that I have adopted in the marketing side of things, getting people out of entrepreneurial poverty through profitable marketing, right and so, with that said, I love the fact that you teach people how to utilize Profit First. So that means you probably are aware of RelayFicom.

Speaker 2: 5:18

I am. Yes, we have some clients that use it. I have one of my businesses on it and that's the beauty of profit first and relay and all of those things is that it is a systematic way to start how to learn how to control our money, because it puts physical boundaries, because that's what a budget is. This is just a physical budget that makes it a much clearer, simpler bucket, but we see the boundaries clear as day. We're not doing math in our head, right? We're not girl mathing. It Very much is what it is.

Speaker 1: 5:50

Well, there's also golf math. So you know, men have.

Speaker 2: 5:54

I need to look into this. I have not heard of golf math yet.

Speaker 1: 5:58

Golf math is the simplest terms and then we'll get back on track here. Golf math is. The simplest terms is that there is a putter. This putter costs $650 to buy. So in golf math we take a look at how many strokes will I save per hole with this new putter and say it's like 0.4 putts per hole. So in a game, 18 holes. Later you're looking at roughly eight strokes per game that you save and say you, uh, hit 32 or we'll say 30 weeks out of the year, 30 games in a year. So there's 240 games. There's 240 strokes. Divide the 240 strokes by the 240 strokes, by the $650 and you're looking roughly around $2 and some odd cents a stroke Pretty cheap and the actual. When I originally heard the math it came down to like 45 cents a stroke and you're like you can't afford not to buy it.

Speaker 2: 7:01

Oh, my goodness, wow, what a straight look. All I'm saying is if you can reverse engineer that equation. I don't want to hear that we can't make more money, keep more money, invest more money.

Speaker 1: 7:12

I became. I came, I went from a 3% profitability with loads of debt, so technically not profitable, and to a a hundred percent debt free and seven times more profitable. Wow, we're actually yeah, I think we're sitting right at right around 30% total profitability.

Speaker 2: 7:35

And so let me ask you a question Can I do that on your show? Yes, please, please.

Speaker 1: 7:39

Yes.

Speaker 2: 7:40

Now, because I know and understand that it's always and never about the money. Where did the mindset shift happen for you? In the profitability?

Speaker 1: 7:49

Yes.

Speaker 1: 7:50

So I think it's fair for our listeners to understand what profit first is.

Speaker 1: 7:54

So, yeah, so we, we, we, everybody understands currently, if they don't know profit first, you probably are under the assumption of gap general accepted accounting practices, which says income of sales minus your expenses equals your profit.

Speaker 1: 8:10

And so Mike postulates that you should go income sales minus your X uh, your profit equals your expenses.

Speaker 1: 8:20

Right, and so in that it has shown me and before it was always just easy to chip away at the at the profit, because it was like there's going to be more profit on the backend, and, as Mike talks about, it's like if you can't afford it with your current profit margins, because that's what you're doing, you're setting your profit margins at the outset right, and then you look at it. And if you are somebody like me right now, saying I don't need debt to grow my company, I don't want debt as long as it makes economical sense, Because at some point I will need to look at leveraging debt, and that's another conversation altogether but because I now have these shackles of like this is what you have to spend and if you can't afford more, you either need to find somewhere else that you're not getting a good return on investment, or what you want to spend money on can give you a better return on investment, or you're just not ready for it yet.

Speaker 2: 9:24

Yes, yeah.

Speaker 1: 9:25

It's not right there.

Speaker 2: 9:27

Prioritize, yeah, and you first, by the way. And it's no coincidence that we're talking about prioritizing your first yourself, first financially, because, especially when you're a business owner, your business will only ever grow and expand as much as you grow and expand and that means that you have to invest in yourself first. You cannot afford burnout right. We cannot afford to have an empty cup when we are the owner, we are the leader.

Speaker 1: 9:59

Right, and you're, yeah, I think that people there are businesses that grow, business owners that grow that do not grow fast enough for their companies Sometimes they're not going to be able to, you know, in the leadership role, right, and if they've done their their, if they've done profit first, what they're paying themselves can replace them and they can live off of the profits itself. Right, and that's what another thing that I'm seeing. So I'm bringing in a junior partner. So now we're shifting what used to be salary to owner owner salaries, right, um, because now we have two owners and we're doing that because we want to make sure that we protect the fact that if we have to replace one or the other, we have the salary already in the budget, in the owner's salary versus the fulfillment salaries.

Speaker 2: 10:58

Yes.

Speaker 1: 10:59

And so it preps you without you having to prep, and the great thing about it you were talking about the buckets. Like RelayFicom for those who don't know basically takes these percentages because, like Chelsea was saying, there's buckets, you know. So you have your profit bucket, your tax bucket, your owner pay bucket and your operations bucket Right and you can get very advanced with it. I think we have eight buckets Right and with that and if you've ever done like Dave Ramsey training, he's the envelopes- that's how I describe it to people.

Speaker 2: 11:31

It's the envelope system in banking. It's the envelope system.

Speaker 1: 11:33

Right, but the great thing about that is in business. So what RelayFightcom does is it actually automatically disperses that money from your income account, so as money's coming in here, it automatically flows into each of those envelopes as you've prescribed. The great thing about that is that if you have a really good month, that all flows in just the same, so that when you have a really bad month, the extra that was put in each of those buckets can sustain you.

Speaker 2: 12:04

It's like magic and it works.

Speaker 1: 12:09

And you help people set that up, because some people are intimidated by some people even shortcut the process. I say, well, I don't need all of those, we'll just do that in our, in our, in our, uh, in our, in our, uh, quickbooks or whatever software that they're using, or we have a spreadsheet that tracks it until you don't, until you, oh well, we have that much money in that bank account, we have, and it's all and it's it's really. That was the thing for me before, when I was using gap. You know, we had maybe four accounts tops. You know, one was for, uh, for payroll, but we'd only put the payroll that was supposed to be in there in there, right, we never had extras.

Speaker 1: 12:51

No, that was the operating budget. And the operating budget was just this big pile of money that if there was money in there, we would spend it. There was no budgeting. And even if I did budget, I didn't know how much I was, because the operating systems that we were using because we didn't always have QuickBooks weren't always telling us the truth of what was spent and how it was spent, because if somebody miscodes it in your accounting system, that means that money is showing somewhere else, that you're over budget and you have to stop over there when you were actually supposed to be stopping over here and you don't actually have that money.

Speaker 2: 13:25

Yes, absolutely. It's a great cash management system. It you know, it's a very good mechanism to controlling cash, and in a systematic way that doesn't require head math or a lot of time or energy.

Speaker 1: 13:40

Right.

Speaker 2: 13:41

And so that is what I love to do around. Money is the education piece. And that's a perfect example, like, if you're listening to this, just trust us. Go read this book, right.

Speaker 1: 13:54

Or I'm sure I mean, so you can read the book. And the great thing is, I mean, I came into it with many, many years experience in battling with my finances and when I did it for me, I'm very lucky in that I learn things extremely quickly, especially when you give me a system. I follow systems really well. I was in the military for 10 years. That was brainless work for me because they had a process for everything. So, okay, that's the process.

Speaker 1: 14:22

Why is everybody confused? This is how we do this. Do you agree with it? No, but that's not your place right now. You just do what you're told, right? Well, that's what these processes are about. But people can get overwhelmed by like, what do you mean? I got to have five accounts. How does that work? How do I get into from where I only have maybe one or two accounts to get to the five accounts? How do I get that set up? And those are people like you are now and that are, I'm assuming, probably even there's a certification that you probably even went through, or do they have that yet?

Speaker 2: 14:55

for profit profit first.

Speaker 1: 14:57

Yeah, implement we have a certification.

Speaker 2: 14:59

We are not certified.

Speaker 1: 15:01

We don't follow it to a t but yeah, because you found some idios secrecies. So what say again?

Speaker 2: 15:09

they do have profit first certification and we do have a freebie. It's kind of like a shortcut to a profit first version to try to get it set up, but it's definitely a process and I would recommend, like work with a professional. If it's not us, there's a website for profit. First certified professionals. Um, because part of using this system and you've probably experienced this there are tweaks from time to time that need to happen and we need to be checking in with it. So now it's about learning how to manage that system.

Speaker 1: 15:39

Right, exactly you are. The Profit First certification is probably just not what is needed for your company because, like, the Profit First is probably just the top of the multi-layered cake we're talking about when working with Kelsey right, it's one of the many things.

Speaker 2: 16:05

It's one of the many and it's necessary, because what we're talking about with Profit First is we're talking about cash management, and that's what it boils down to. That's what's important to us.

Speaker 1: 16:13

So it's one tool.

Speaker 2: 16:14

Yes, absolutely, but it's not.

Speaker 1: 16:17

Yeah, oh, yeah, for sure. I mean, if you can't start with profit, then yeah you're. You're not running a business, You're running a job, you own a job. If you're not running on profit period and um, and I love getting my dividend checks because that's above and beyond my salary right.

Speaker 2: 16:35

Like can you imagine listener who struggles with finance right now that it actually being fun when you go in and move money around?

Speaker 1: 16:42

Right, we'll get to that point. Yeah, exactly. So talk to us a little bit about that. Right, there is the top right. That's just scratching the surface of like, well, we got to get your cashflow right, because in small to medium-sized businesses, cashflow is king period end right. So what's the next? What's the next level of what you bring to that smb?

Speaker 2: 17:03

uh, business owner yeah, so what we've talked about up to this point are more like systems controls to manage right. So, along with cash, we do your accounting, payroll all the necessary things those make up the foundation of what any business needs. Just to have financial clarity, because you can't measure what you can't see Right, right, and so we have to have that data.

Speaker 2: 17:25

But the next step to that, and the step that mystifies a lot of people, is how do I start building financial intuition? How do I put KPIs in place and measure my growth and know which? Trigger to pull and when and how to anticipate and what a leading indicator is and a lagging indicator.

Speaker 2: 17:40

Numbers tell the story around your entire business operation, and the simple thing about finance is that it happens in quarters. It happens very consistently. We can anticipate exactly when estimated taxes are due. We know all the things. It's just being educated around where to look as a business owner.

Speaker 1: 18:01

Right.

Speaker 2: 18:02

Right and how to do things like forecast the next 12 months of profitability.

Speaker 1: 18:07

Right.

Speaker 2: 18:09

And have a tax strategy, not just prepare your tax returns. So we really encompass all of the education and we have services and programs around everything it takes to manage business finance and even stepping into now we're getting ready to release a online course on a personal financial program for individuals.

Speaker 1: 18:31

I think, it's so important. Yeah, I mean, it's funny. I showed my wife the profit, um, the profit first. Uh, concept Right. And I was like this is how I run my. She doesn't run her finances that way, but I run my finances exactly that way. I don't have all of the buckets as much as as as I would for my business, but my spreadsheet for, like, what's in my savings account it's all laid out and it's like that's how much money I have. Okay, cool, then I can transfer that over here to my spending account and then, and that's what that's used for, dot, dot, dot. You know, and we and we do still, I mean he's she's a big Dave Ramsey fan, so it's easy for her to to do the concept. But I think that if you're running your personal finances into the ground, where are you going to get the money to get yourself out of the hole? You're going to steal from your own company.

Speaker 1: 19:21

So I think it's wonderful that you guys are expanding that in basically saying, hey, let's set you up for success before you even get to the office, before you even open up your quickbooks, so that you are not tempted to breaking your rule of running in profit. I think that's so, you're the first financial advisor, business, a business coach and any of that stuff, consultants, cpas, anybody that actually sits there and says, hey, listen, we're not going to just teach you about your business finance, but we're also going to educate you on your personal finances. So, congratulations. A big round of applause to you. I think that is super awesome. So, before we run out of time, I want to know what are the first steps besides buying Mike's book, the first steps somebody would need to take to make to at least get an understanding of where they stand right now, if they're not using Profit First right now if they're not using Profit First?

Speaker 2: 20:23

Yes, so that first step is always we have to face the numbers and in my experience that can be really hard for a lot of people the avoidance of even doing it. Accounting, bookkeeping, is something taxes. It's so easy to put that stuff on the back burner. But my suggestion to businesses, to individuals even, is lay eyes on your financial data. I love for personal finance. I love rocket money For business finance. Hire a bookkeeper if you don't know what you're doing, because garbage in, garbage out. You have to lay eyes on where you are at now and it's a journey.

Speaker 2: 20:58

There is nothing that can change overnight. There's not a lot that can change overnight in your cash, but what can change overnight is you committing to the plan and to the journey, because the world of finance is. It's a lot and there's a lot of misinformation out there. But take it one step at a time. Know who your key financial players are. We've got a free downloadable on the website moneymasteryorg. One of them is educating you on who those people are, because it's not just me. It's your financial advisor If you have a retirement planner. It's knowing your banker if you're a business. And so take the first step, make the decision that, even though you don't know what you're doing doing, and even if you feel like you suck at money, step to the table, because there is always a way and you're a great story of that Turning things around when you commit to sitting at the table and open the conversation with your money.