Takeaways
- Danielle says that your numbers are the heart and lifeline of your business.
- So many people have a history with money. What stories are you telling yourself?
- Bookkeeping requires you to be more detail oriented. It forces you to be on top of your numbers and not be afraid of it.
- Danielle says she believes there’s power in measuring your numbers over time and be able to make changes in your business. It’s not magic, it won’t happen over night, but these three steps are:
- 1. Have a record keeping system for those numbers.
- 2. Have a set of financial metrics.
- 3. Look at your numbers, learn from them and take action from them (most important).
- 7 Drivers to business:
- 1. Pricing–understanding how we’re priced to not just have a profit, but achieve your goals. (All goals should be set on: what’s the profit I want to make, how much debt do I want to pay down, and how much do I want to take as owners draws). Price your services at the true break even point.
- 2. Volume–how much do you need to sell to hit those goals? High ticket and sell less, or lower ticket and sell more?
- 3. Costs–the two main costs are cost to goods sold and direct labor costs. Look at this information and see how much you can reduce the price you pay by 1% and increase profits by 1%, that makes a 2% profit.
- 4. Operating expenses–how much are you spending to operate? Can you slow it down by even 1%?
- 5. Accounts Receivable–who owes you money? If you can collect that money 1% faster, collecting credit cards, shortening payment terms, giving value to customers who pay their bills quicker.
- 6. Accounts Payable–who you owe money to. How can you slow down the payments that go out to your creditors, contractors, and vendors. How can you slow down cash moving out of your business.
- 7. Inventory–the amount of stock you have on hand, or employee utilization.
- Danielle says that when you think about pivoting ask yourself if you’re pivoting to add revenue models to your business, or are you pivoting to leave behind what you were doing in the past?
- When you think about budgeting, think about your time and energy.
- Danielle says when you’re investing in a team, if it’s your first hire you should think about how much it costs to do credit checks, background checks, get them on payroll, all those things. (Danielle has a worksheet on this).
- Let’s talk about paying yourself as the business owner. Danielle says there’s a “Risk Tolerance”–she doesn’t think raises and bonuses should be given till we have that 3 month cushion in our bank accounts. She says on the low side, she likes to see 15% of sales going to payroll. On the high side, no more than 65%.
- Danielle says years 1-3 you might not see a huge profit, a lot of people choose to re-invest rather that take money on payroll.
- Tax saving strategies you can implement: Keep your business and personal separate, but don’t forget to actually deduct all the things you use! (Business dinners, cell phone, etc., if it’s for business, deduct it! Don’t be too afraid of the IRS).
- Can you expense hair, nails and clothes for a photo shoot? Danielle says YES! Absolutely.
- Financial freedom hack: look at your numbers as a CEO. You, as the business owner, should have a clear set of numbers YOU look at on a regular basis, with the intention of what are the numbers telling you, what do you need to pivot, and then take that action.
Highlights
- (1:41) A little more about Danielle.
- (3:06) Your numbers are the lifeline of your business.
- (3:25) Letting your money stories go.
- (4:32) How can you use your numbers to grow and scale your business?
- (6:09) 7 Drivers to business: What should you look for in your numbers to scale.
- (10:37) How would you budget through a business model pivot?
- (12:31) When you’re investing in a team, what are some KPI’s you should be tracking?
- (16:08) How do we know how much we can pay ourselves and when to give ourselves a raise?
- (18:54) What does the first 3 years of business look like for paying yourself?
- (22:40) Tax saving strategies you can implement!
- (23:55) Can you expense hair, nails, and clothes for a photo shoot!
- (24:43) Financial freedom hack: look at your numbers as a CEO.
- (25:44) One of the best books Danielle has read.
- (25:50) What does it mean to Danielle to make an impact?
- (26:27) Where to connect with Danielle Hayden?
Quotes
“All goals should be set on the profit I want to make, how much debt do I want to pay down, and how much do I want to take as owners draws.”
“Everybody should have a money team.”
Resources
Gusto–payroll system
First Hire Budget Worksheet:
Connect with Danielle Hayden:
Website: kickstartaccountinginc.com
Book a Call: kickstartaccountinginc.com/bookacall
Instagram: @kickstartaccounting
Book Recommendations:
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