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Financial Responsibilities

One of the most important things to do to know about financial aspect of your business you cannot make money without investing money you cannot grow your business without advertising without marketing you cannot network without going traveling perhaps to a conference to a place and connecting with someone in an industry that's money so you have to be prepared for these types off expenses and I prefer to look at money that goes out not as an expense but often times as an investment and here's why when I think about expenses it's like I'm putting the money out right it's gone but if I think about it as an investment what do we expect when invest money I expect money to go somewhere and then it makes money while you know while it's out there investing and when he comes back to me it's more than what I've invested in the first place that's how we like to think about that's the mindset I want everybody to have when you think about money this is you know when you pay for the trip when you pa...

y for the network when you pay for the dinner with the person you this mentoring you it's not an expense it's an investment in your future what better thing is there to invest in yourself? Because this you can always rely on everybody else who knows but you yourself can always rely on yourself another very important part off financials is budgeting and you know me by now, I really like numbers because numbers tell the story, it doesn't matter what you tell me on how it's doing, I look at your numbers, and then I know exactly if the business does anything, or if it doesn't what's working what's not working. So we ran our google analytics this morning, I got my report just just looked at a ten minutes ago from my google analytics person who said, okay, this amount of people that came to the website this way, we're coming from this is the amount of time to spend on the web site. Why do I want to know this? Because I want to know if what I do works, the only way I know if what I do works is if I contest it, so make sure that you get your numbers, you know, your financial numbers, you're you're analytics numbers all number all nine percent good numbers, you know? And then you just interpret them, they are what they are, they're will be better. And if you haven't reached your number, you haven't reached your number yet. A very good exit and one of the er in one of my lincoln groups, somebody said we he didn't want to separate his personal from his business account, there's always a different side to it so he says well why would I do that? Because my accounting system is so good that I can pull out my business report any time from my personal I do not recommend that and you remember why I don't recommend that by what somebody might like me not recommend you having one accounts hello is that too? Okay because your business is separate from you yes that's exactly the reason because it's a different entity so if I keep you know my ties so close would I want to see on my business account every time I treat my kids to ice cream? Of course not and then how would I really know if how my business is doing? I want to open an account and I want to look it and I want to see what is the number for the business I don't want to know where I am and you were exactly right because when you go into a lawsuit or through an acquisition they look at everything but if you have a corporation which I did and of course my accounting was separate from my personal then my business a county was separate for my personal there was no reason for them to look into my personal accounts and they all had the business so you don't really want to divulge all your personal information you want to keep it separate it's good practice good come in uh hungarian in the u s ah wants to know what do you mean by invest in yourself? Are you talking about education specifically great great feedback so what's an investment in myself and investment in myself is when I education this is a great investment in yourself because you're learning something so investment could be a skill set it could be it could be in a piece of equipment it could be a new computer it could be a business class it could be a class teaching you how to you know, get better at a certain scale how to improve something so investing in yourself is like everything that helps you to get better at what you do remember I have a photography degree I teach a business class how can I do that? Because I invested insane amounts of money to study with some of the best people in business and internet marketing tto learn what works because I always follow the money because I figure if I hang on to the people that make the money right now then I will be able to get learn the strategies that get them there and then I'm going to apply the strategies to what I do and then I can teach it so I've I've done it by myself that this is what investing is all about all right? Um professional professional operation has a number off different uh, elements in it one is, of course, proper accounting. The other one is proper reporting and budgeting, and I remember I shared the story with my controller when she was walking into my office and she locked the door until she looked at the budget and if she wouldn't have been so tedious about itemizing where the money was coming from, I would have not, you know, taken sit made certain decisions that I made, so make sure that the, you know, when you look at the reports and sometimes especially begin it's really hard to not be discouraged by the numbers because the numbers are so bad, right? But it you just do the best you can with what you got that's all you kind of can do, and then you revise them, and if you haven't reached the number, you haven't reached the number yet, right? So we just go back, it just takes a little bit longer. You, of course, have to take care of your taxes so you must calculate the taxes, and, uh, professional operation involves invoicing, invoicing to me, it's, not a little hand. Written out advice to me is a proper invoice that has, you know your address, an invoice number, a date services rendered described what the services is if you're if you're content provider er describe what what it entails, what the usage is this the one time is it a two time is a three time do they have the rights forever? What are they going to get from you? So I find that invoices always have to be very specific because that's, your document that you're referring to, I also like estimates when someone said, how much does it cost you, connie, to be able to tell them how much it's going to be, and you have to be able to justify that by saying, well, I'm estimating that this this coaching or this, uh, process with you will be taking let's, say, three months, and my monthly fee for this would be three thousand dollars. So you're looking at approximately nine thousand dollars, and for the nine thousand dollars, this is what's going to be included, we will be meeting once a week for one hour via go to skype or some other google hangout, and I will providing the documents for you on the on a shared file, a server like a cloud or google dogs, or, like dropbox and, you know, be this specific, so people really know what they get, they want to know what they get, they don't know and remember, if something is so easy that you can't believe people asking that they don't know that yet, so you always won't be very specific about what it is that you give them little by little by little purchase orders and we'll talk about this when we have our our guest on purchase orders are about, uh getting an added legal protection because if it's a difference, if you have an estimate, if you haven't estimate that's been signed or if you have a purchase order because of purchase orders actually has illegal legal feedback, especially in the united states I don't know what the terms is in in other parts of the world, but if you have a purchase order that's been issued from the company they oh made money available for this process for this product of the service you provided and ur shall they ever go bankrupt? You're in the top of the line of getting paid versus everybody else who just has invoices that haven't been gone that haven't been put through the purchase order process how to calculate expenses so we had the expense worksheet and that wass okay, so that was a thirty eight so how did you guys do with the with, uh, expense worksheet guesstimate estimated? Okay, very good because I do want to talk about this a little bit, so start up estimates to arrive sort of hit a budget we need to really think about all the things that go into building a business and we talked about the human capital and we had this question about the investor right? How do you grow the company? Can two people grow a company faster than one person? Yes if not, don't hire that person can five people grow company better than faster than two people what they're doing yes for how invested there yeah you cannot hide we already covered that we will not hire anybody was not invested because you remember you're the boss you're in charge if they don't perform, they get the boot I'm even very important today so so you know we don't have these questions yes, the answer this yes, people that we hire after you've been through this course after you learned anything you have to watch out for ofcourse they will perform because you are the boss and they're working with and for you and you will be able to with the drop descriptions all the other things that we've done you will be able to make sure that they're really doing what they're supposed to be doing. Yes, I wanted convinced yes, yes, you know, flight attendant I've wanted verbal confirmation. All right, so have how did what was the most difficult thing about doing the homework and I would love to open that up for our life audience please you know, for all of you with the workbook, let me know in the start of expense worksheet what you struggled with because this is the time for those questions to come in so let's talk to our life audience good I forgot to put myself in there until the last minute right like and I was just like whoa wait a minute that was like rule number one ae I just I didn't I didn't even think about paying myself until the very last and then of course that changed the number drastically that is such a great mistake to share is it like we pay everybody else and then we totally forget about ourselves okay good so make sure you're in there so did you go through the through the thing like well there's no item in there for me oh I figured that I figured out where it wass where was it um it was it was in the pre opening salaries okay good right now as I was saying yeah yes I'm that I would be salary yes you know yes ok good anybody else wants to share what came up? I just wanted to thank you for having us go through this exercise it was really, really helpful and I sat down and I mean some of it it was easy because I already had some things in a spreadsheet that I you know or for example I knew there was some equipment I wanted to buy could easily look up um what those things were and how much they cost but then as I was going to the list has like oh wait, what about this and what about that and then suddenly I mean it it was a simple process yet I realize it's more complicated than I've been I am thinking about it a cz and so it was it was great just to get these things down on paper and this was the first past I'm sure it's a work in progress but but what what a concrete way to make cem cem steps towards getting more serious is it becoming maria it's absolutely becoming more real? Yes yeah did this make it feel more real? It excited me because like when I was in heroes I was in the world of but what I want my business tohave and one of the things that they that it said furniture I'm like standing death rightly I want like like in the world of what? What could empower me and what would like physically enable me? I didn't hesitate two thousand dollars because I know that's what it would cost, but it was like if I'm gonna be professional I'm gonna be the best that I can be I'm going to take care of my health and well being in this in this process is well, right? So that was something that just excited me thank you for sharing that and I like that you say that if I do it and if I put the time and energy in it I'm taking care of myself yeah and that's really something that I think is important for everybody in our audience for all over the world this your business make sure you're taking care of yourself because if you don't take care of yourself no employer freelance is going to come up and say hey you're really you know treating yourself not as good as you should you have to make sure you take care of yourself so do we have any uh, feedback we're asking actually do you recommend any sort of off the shelf software accepted to help you keep on track with finances? Is that something you feel if somebody is daunting but it's gonna be useful to them or doing that become reliant on it colin jeez asking that lindsay's asking us well something like quickbooks is that going to be okay so accounting is definitely done in in in quickbooks pro or in uh m y o b or in some sort of similar professional software and I'm going to ask you guys this because you just went through this would you have do you think this is an easier process to do what you just did for homework then it would have been to sit at the computer and go through this line by line and budget I have books at home I haven't accountant for a mother and it seems so overwhelming that it almost becomes a stopping point right there just looking at these simple line items and being able to focus on them directly is better and then go on and find a part time person who's does your does your your your quickbooks and whatnot it's like you say it's a matter of what you invested and what you're good at what you're you're you're strong point is if you want to be an accountant you'd be in the business to be an accountant right? And so it comes down to just getting the big picture from this workbook and then hiring somebody to do to do the details and be that for you that's great feedback anybody else I have a financial wiz for husband so he's had been putting all of you know all of our expenses into quicken and what not and so it's very princess things out reports free and perfect s o I think last night just sitting down you know, for I don't know forty five minutes t do this was with the workbook was a nice easy task that had a beginning and an end um I value having all the little details too because I think that will be the next step is drilling down and getting more specific um so yeah one note on dividing personal and financial um expenses is part of my plan is to turn our home garage into an office and that really made I sat down with him and we're like well, where is the money for this? You know, we have some funds are we gonna, um what what's a house expense what's a visit business expense and how do we separate those things? And it was a fantastic exercise t think about that good. And so the answer to the question really is I I find that when you have something that is and I'm going to just really show it to everybody when you have something that is so simple and look so non intimidating like this does the chances that you going to do this overscheduling time to go on your computer and go through a program that was probably designed by accountants with every line item on the planet is probably going to be about this long which is probably more intimidating than this so my objective is what would make you more likely get started and that's what you start with if you this gets you started more likely do this now if the other thing gets you started then do this now but this is what you said forty five minutes she got a budget hello can you beat that? You know, a first budget is it perfect? Of course not, but she got some sort of a budget yeah, we have a comment from lm she's talking about the importance of uh I'll just read her think it's so important that as a business owner, you know at least how to read and understand the reports whether you hire someone else or you get someone in the family to dio this for you, would you agree? Okay, absolutely. So here's the here's the thing about that? How do you know if they tell you the truth or not? The only way to figure out if someone tells the truth is to know enough to know the difference. So great for your husband and great for your mom. This is the only thing that counts for you because at this point we love them. I don't really care about them as much as I care about you, because to me you're the business owner. You need to have this, and when you have enough understanding ofthe what these numbers say and do, then you can say here's the report that I want and here's thie analysis that I want and I want it monthly and I wanted quietly I wanted yearly I want a comparison I wanna budgeted versus an actual I wanted, you know, projected a couple months out, then you know the language and you can use it, but yes, the answer is he absolutely should figure out on how to know enough about it so you know the difference if someone pulls a hood over your head or you're looking at the real numbers good. Okay, so let's see what's coming up next? Um, is this sort of was this a good experience for you? Any other questions on that? I really want to make sure you're taken care of with the budgets and the budgeting. Well, there was a question on the loans good bank loans, other loans. Uh, I personally didn't put anything in because, like my man mindset is more tio go with least expenses as possible. So loans as of right now, I considered took off the table. Okay, so is it something to reconsider? We have another question similar to that crazy shooter wants to know when is it okay to get a bank loan? When you start out? The rule of thumb is you should always get at least a line of credit to have cash flow covered and it's always better to get the line of credit approved before you are out on your own. And, you know, and you starting to have more outflows versus inflows, so I rather have you because people go like, well, I don't need money yet, so why would I be going looking for money and then they didn't budget for then they're going to run out of money and then they go one now I need money and now they go into the bank and their reports look terrible because on paper it looks like they're losing money and so the bank goes like we're not going to slit our wrists you're not getting any money from us because you clearly not making any money but when you go into the bank and you say, well, here's the business, you know, here's how I budgeted I you know, I'm probably not gonna get any money for for the next three months or so, but there's a good chance that when I have to manufacture when I have to get paid the programme when we put the website up when we create the membership program is going to be three months that I will have to wait before the money kicks in so I need a line of credit in the amount of twenty five thousand dollars let's say to cover me, you know, cover my cash flow it's much easier and on that note I will tell you that you know another person example so one of the things on how my company actually got to be acquired wass when we had so we had built up this celebrity syndication and architectural interior exterior photographs which were used for food books for coffee table books for advertising we were the brand leading image for gold, well bled banker for two years and for all these different applications, but it was rights managed, and we had a lot of requests from our clients that wanted to know on how to put a brand together, a royalty free brand that was less expensive, where the quality didn't have to be as high as our flagship brand. And so when we did this, I said down, and I did exactly this with my controller, and we said, if we're building another brand, how much of our man or woman power is going to have to be used for building this brand? Which means if I take away the manpower from this brand and building a new brand it's not making money over there so we had to estimate that the money, you know, that our revenue was going to drop naturally because we were going to build something up. So, you know, at first the curve was going to go, but then as this was going to start, you know, this was going to, and now the curve would go up would go up faster what do you think happened to me when I saw the number step, I freaked out? Like what's going on and that's when I could go back to this and say, well, we estimated for this we planned for this we knew this was going to happen and that is so satisfying when you've budgeted it out and you say oh, I know exactly where I am we just entered the dip and then you look at this and you say, well, if I budgeted it dried on that the dip is going to happen just a bed now and I see the curve going up over there then I you know, I'm on target and that's a really good feeling because now you go like yeah, deep breath you do any for me? Yeah, just thinking about it made me talk on and then what happened is when we were at our launch party and we unveiling this brandt called inside out picks that was that last push the company got for somebody said this is valuable this girl knows what she's doing. We better go in and out before she gets to be too expensive and that's when we got the offer I mean, we we we only launch with what, five hundred pictures in that in that collection and it's now still to this day a pretty, pretty well doing, uh, royalty free collection for everything living, so it is totally possible