Thoughts on Corona and Personal Finance Things to Do Now

Posted on by moneycoach

Yesterday the governor of Ohio extended our lock down until May 1st.  That’s another four weeks, and it made me suck in my breath when I heard it. Another month seems like forever, at least it did last night. This morning I have a different perspective. I have 28 days to focus on business and personal development, to do some at home projects that have been waiting until, “I have time” and to embrace the warmer weather with the chance to work outdoors.

It’s always good to find the positive to keep spirits up. Admittedly, I woke up a little annoyed this morning, but after about an hour and a call to a friend (and an accountability partner) things feel better. I know that a lot of people are concerned, or even downright scared. The best thing to do right now is to hunker down and take care of ourselves.  In my own household there are going to be changes we need to make around our personal money (and likely many of you as well) and I wanted to give you a little advice on the best way to take care of yourself and your family financially to get through the crisis a little easier.

First and foremost, stash cash. Know your amount for the personal four walls and pay them first. You need to pay for your four walls- food, utilities, rent/mortgage, and transportation. Apply for the unemployment assistance if you are laid off or furloughed.  If you are a business owner and unable to pay yourself enough to cover your four walls, apply for an emergency disaster loan. The good news is that you probably don’t need to gas up the car much. And you are eating at home more, so food bills are probably lower.

Second, call your creditors and ask for payments to be deferred if you cannot make them now. Forget the FICO, seriously. You need to eat and have electric to cook with. Many banks are starting to get on board with waiving late fees. Let them know you applied for help, but they need to wait until you can pay them without depleting all of your cash.

Third, don’t make any financial decisions or make sweeping changes right now. Keep your money picture consistent right now. Don’t cash out 401k or sell stocks, etc. These will have longer term consequences, and there are federal programs that have been created to help all of us get through this crisis. Remember, we are #allinthistogether.

Entrepreneurs By the Numbers- You Are a Rockstar

Posted on by moneycoach

It is the last day of the first quarter 2020, and I wanted to share some numbers with you , statistics really, to show you just how special and amazing you are as an entrepreneur. Read these, and feel free to puff up a little. You take the ups with the downs and show up day after day. That needs some celebration.

So here are some stats about the beautiful group to which we all belong to:

 

  • 62% of US billionaires are self-made
  • In 2016, there were 25 million Americans who were starting or already running their own business
  • 60% of people who start small businesses are between the ages of 40 and 60.
  • There are 582 million entrepreneurs in the world.
  • The Small Business Administration (SBA) also reports that 1 in 12 businesses closes each year.
    • 5% of small businesses fail within the first year.
  • More than 70% of all small business owners ranked their happiness level higher than 5 on a scale of 1 to 10
  • From 2000 to 2017, small businesses created 4 million net new jobs
  • Currently, 9 million people are employed by small businesses
    • This is a 1.1 million increase from 2016. This currently makes up 47.8% of U.S. employees
    • More than half of small business employees say they feel happy with their job
  • 64% of small businesses currently have a website

For the Ladies:

 

Pretty great, right?

Print this article out and keep it somewhere you can see it on challenging days. Every day you get up and show up to serve you are a Rockstar. Thanks for bringing your passion project to the world.

Happy Entrepreneuring!

Top Five Money Mistakes Business Owners Make (and How to Avoid Them)

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  1. Not separating Business from Personal Accounts. You must have a separate financial identity for your business, even as a solopreneur or freelancer. Keep your money separate and write yourself a paycheck from the business. No living out of the till. Use a fee free checking account for all of your business income, and pay your expenses, including your paycheck, at regular intervals from that account.

 

  1. Immediately Making Large Purchases for the Business. Often these large purchases are made on credit, putting the business immediately into the negative with debt. Do you need that new computer right now? How about that website? All of those services? Keep the business lean by purchasing only the necessities. Know your B-Number to determine the amount of money you need to make based on prioritized expenses and put large purchases on hold until you have the cash.

 

  1. Having too Much Personal Debt. Personal income is often dipped into when businesses are first starting. Until the income really gets going, it’s not unusual to pay for certain expenses from personal funds. Having a large personal debt load means less money available for business expenses if needed for perhaps a marketing funnel or to pay a large expense that comes up. On the other hand, if you are relaying on your business to pay all of your bills, personal debt means more money needed from the business, and less money staying in the business for growth or new launches.

 

  1. Not Saving for Emergencies and “Down Times.” Business is cyclical. It just is. Income will be variable, particularly in new businesses who are starting to get visibility and a steady income stream. It is always a good idea to keep an emergency fund on hand- set aside into a free checking account for those months where you don’t make enough to pay those B-Number expenses. Some advice for starting and funding an emergency fund can be found here.

 

    1. Not Having a Clear Spending Plan for Your Business. Money can easily run off and spend itself when your business doesn’t have a spending plan. Always starting from the B-Number, where is any extra money going? You may get by for a bit, but having a plan ensures you can afford to take certain steps in your business. Taking 45 minutes a month to map out upcoming expenses or expansions and what you plan to spend where. If you need accountability or help with your plan, go ahead and check out our Business Money Planning Group.10

Three Steps for Making Business Cash Flow Management Easier

Posted on by moneycoach

When I was at a conference in San Diego last month, I had an epiphany about most new business owners and their business money stuff. Typically, when I work with a family on personal financial management there is a history of making financial decisions that became habit. When we work together, we have to often change years of money habits so my clients can reach their goals.  Business money management is different. Entrepreneurs are not generally “taught” how to manage their money. Rather than a habit to change, there is some learning that needs to happen.

 

In personal finance we are generally dealing with a set amount of money that consistently comes into a household as a regular paycheck on regular intervals. So, we can start from the income. Knowing how much you have to work with makes planning easier. You know how much it will take to cover all of your expenses.  When we have a deficit, a second job can be a solution, and once again we adjust to the new income.

 

Business isn’t that way. You may have income in the first week of the month and nothing in the second. We may have extreme income differences each month, and we may not know how much we will have to work with when the month starts! This difference is what often leads to cash flow emergencies in business, and stress when you are running negative cash. You must know how much you need to make to cover all of your expenses, but you may not know exactly which week you will make what you need.  Business money management is more dynamic and requires at least a weekly look at how things are going. 

 

Here are three simple steps to managing your business income as it comes in, and to keep cash on hand.

 

  1. Know your B-Number. You must know what you need to make, and you must prioritize the B-Number expenses first. Pay these above all other expenses to keep the business operating and able to keep generating income. If you do not have it, get your free worksheets at www.entremoneycoach.com.

 

  1. Track your income as you make it. You don’t need to obsess over your money each day, I had a client who did that, and she never enjoyed being an entrepreneur. Just write down what you make every day you make money. For simplicity, go ahead and write the totals on a calendar the day it comes in.

 

  1. Pay your expenses when cash flow is positive. You can pay the bills weekly or bi-weekly but know when you have made your B-Number, and when you are funding other things such as marketing, debt, and growth. Other coaches may disagree with me, but I have held the water bill for an extra week to ensure that my cash flow was positive, meaning I had more left over after I paid the bill, and didn’t let it run dry. I tend to be a little nervous about not having cash on hand, so I wait until I have sufficient cash to pay my expenses.

 

Finally, as you are making more and more over your B-Number each month, make sure you are funding an emergency fund. A good rule of thumb is three times your B-Number to keep on hand to protect against cash crunches. Just open a free checking account and start to put some money away.

Here’s a Pricing Tip: Add a Profit Line to Your Service Prices

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Many entrepreneurs low ball their prices for products and services in the beginning. I did.  For my own story, I had a coach that told me what I already knew, I was undercharging. Imposter syndrome is a real thing, and many of us tend to undervalue ourselves and the impact we make in the beginning of our entrepreneurial journey. This seems to be very common with service providers. Coaches, consultants, and freelancers typically start lower than they should, and are sometimes very slow to raise prices. Margins in service businesses are typically higher than many product-based businesses. Because there isn’t a “wholesale” cost, so to speak, many of us struggle to price our services. And if we don’t have a responding increase to the cost of doing business, we tend to struggle to “justify” a price increase to ourselves.

 

There are a lot of articles and methods for pricing yourself in the marketplace, and also ways to raise your prices.  What I want to offer is a way to raise your prices when you are resisting the increase by identifying the increase with a name. We’ll simply call it the “profit line.” This can help with some of the hesitancy to increase prices, your “base price” remains the same but you add on an increase which you categorize and have a real purpose for the money.

 

This system works because many of us struggle with money mindset, and the thought that raising our prices might mean we are greedy. “I don’t need that much” is the cry of the resistance. But you aren’t in business only to solve your needs. You are also in business to create profit and to reach your financial goals. If you don’t have yours defined yet, let’s get some profit goals and the why behind them written.  

 

You can decide what you want to add as a percentage or a number. For example, you charge $200.00 for a service. You add $20.00 as a 10% pure profit line, and the new price is $220.00 for your service. Your prices are raised, a bit, and moving forward every time you sell that service, you siphon off $20.00 to put into an account for profit. Give that account a name, a purpose. You don’t have to stop at 10%. You can add 50% profit and make your service $300.00. Your decision.

 

If you are resisting raising your service prices, give this method a try. Go ahead and figure out how much profit you will have in an account in a month if you add this line. Plan your next business move. What is this specific profit amount going to be for? Remember that any money without a name will run off and spend itself. Go ahead and raise your process. Just do it. Add a profit line this week. Happy Entrepreneuring!

 

As Entrepreneurs, We Need to Embrace the Journey

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This blog falls on, “I Want You to Be Happy Day.” Just so you know, I want that for you, I want you to be happy. As entrepreneurs we are always reaching for the next thing, and we can lose sight of our progress and just how far we’ve come. I know that I am guilty of this. I have a coach who celebrates successes every Friday, no matter how small. Just so she won’t forget. Perhaps you can try that this week.

We hear a lot about employee wellness. Benefits in some companies include a number of free mental health counseling sessions, financial and retirement planning, and even gym memberships. But entrepreneurs tend to focus on the company and not personal wellness. And that can affect how you show up in the world.

Let’s be honest. Balance as an entrepreneur is a joke. There’s no such thing. Particularly in the beginning, and any time we scale and level up. We are either running “balls to the wall” to get stuff launched, shipped, served, and completed or we are in regular mode. I’ve never met an entrepreneur with perfect work/ life balance. Because many of us are “all or nothing” effort givers. But when we play, we play equally “all in.”

If we can accept that about ourselves, I think we can get rid of some of the “lack of balance” guilt, and just focus on enjoying the journey. I’ve made a commitment to focus on that for 2020 as well. Here are a few things that I am doing to try to embrace the journey.

1. Perspective and purpose. I have a saying, “The perspective you have is the seat that you sit in.” If we are all in the same car going to the same place the driver will have a different perspective than the passenger in the back, and the passenger in the back will be different than the front seat. But we are all moving along on the same trip. I try to keep that in my mind always. People do not have the same sense of urgency about things that I do, and that’s ok, unless I am paying you to have my urgency!

Others will rightly view things from their point of view and how THEY benefit from the transaction, partnership, or experience. Keep that in mind. If you keep “realistic” expectations of others stress melts. You can understand someone having a bad day or being frustrated. You can remind yourself that we are all human, and not hold yourself out as “more betterer” than anyone else. We all know how to operate with grace and service. Keep yourself there and the journey becomes a little easier to walk.

2. Gratitude daily. I am admittedly not much of a journal keeper, so I personally struggle with a daily written exercise, so sometimes I just tell myself three things I am grateful for. I try to do this every morning, and again in the evening. Particularly after a challenging day. It doesn’t matter how you do it, or where, or when, try to cultivate an attitude of gratitude throughout your day. It really does help change a bad mood.

3. Be present. I have to work on this one, I tend to have a million things in my head at any one time. But I am really working this year to be present in every interaction. To give 100% of myself to my colleagues and clients. To listen carefully and give nothing else my attention when I am working with someone. It has actually made work more enjoyable. Everything else can wait. I have made it a practice to spend 2-3 minutes before a meeting doing a “brain dump” onto a piece of paper before a meeting if I have a lot going on up there. This way I’m not afraid of forgetting everything. I wrote it down and can be focused now on the current thing.

I hope these few tips help you embrace the journey and love your life more. I’d love to hear your tips as well. Shoot me an email, post a comment, or hit me up on social. I am committed to making my walk as joyous as possible. During the climb, not just at the summit. Happy Entrepreneuring!

Simple Strategies to Build a Business Emergency Fund

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If you’ve been following me for any time, you know that I am all about protecting your business, now, wherever it is in its evolution. One of the best ways to protect your business is to have an emergency fund. Also known as a management reserve, this fund is a stash of cash equivalent to at least three times your monthly expenses, including your paycheck.  The importance of having extra cash for emergencies cannot be overstated. I have worked with entrepreneurs who spend everything they make each month in profit. They enlarge marketing budgets and add services to their businesses but have no cash to protect their existing milestone.

Three times your breakthrough (B-Number) is my recommendation for a first emergency fund goal (you can easily calculate your numbers with the free worksheets at www.entremoneycoach.com.) The reason I believe three months is a minimum number is that if the sun explodes, you still have a full quarter to right the ship. You will have expenses and a paycheck for the three months it takes to pivot, to launch, to take corrective action in your business. 

At first that number may seem a bit high, and honestly you may be thinking, “I’m barely surviving right now, you want me to save HOW MUCH?” But it is possible to save towards your goal and hit it in a few simple steps.  

  1. Get Set Up for Success. Make sure you have a separate bank account so that your emergency fund money doesn’t get comingled and accidentally spent. Keep it liquid but keep it separate, even in a different bank. Have a fee free checking account, with checks, for access and have a defined list of what constitutes an emergency.
  2. Put a little in each month. Make your emergency a line item in your budget. If you write down your savings goal, and you write in a goal for saving a certain amount, you are more likely to do it. Save a little each month, and you will be amazed how fast it grows.
  3. Make larger deposits as you make more money. Alternatively, or additionally, save a portion of your profits over your B-Number in a good month. Let’s say that you have a very successful month in sales, commit to stashing some portion of that profit in the fund.
  4. Celebrate your progress. You are actively taking steps to protect your business should you need a little money to cover you.

Treat your emergency fund as a priority and it will be funded faster than you expect. And once it is funded, you are done! You will then be in a better position to grow and take on new growth and risks, and more confident knowing you can cover what you need to every month. Happy Entrepreneuring!

Managing the Finances When You Are a Multi-Passionate Entrepreneur

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I am a multi-passionate entrepreneur. Across the businesses I am a teacher, coach, and cheerleader, but my businesses are very different and have very different audiences. I teach and coach entrepreneurs with their money and strategy, I tutor and coach non-traditional law students through school and the bar, and I teach ballet, tap , and jazz one day a week. And I am passionate about each one of my ventures. I know there are some of you out there who are just like me. I wanted to take a minute and support you by providing a few tips and tricks for balancing the finances across entrepreneurial pursuits. We will start with the “rules.”

 

Rule number 1: Every venture is different; you must separate your finances. Period. I have accounts for each business. I have check books for each business. I go so far as to have Stripe for one and PayPal for another to process payments. The money is earned in different businesses. By using PayPal, I can also “park” the money until I need to transfer it. No co-mingling. I keep everything absolutely separate. So should you.

 

Rule number 2: Expenses are different and should be tracked for each venture separately. This is as easy as putting all the receipts in a different folder, one for each business. Make sure that you pay the right expenses from the right account. Another benefit of PayPal is I can send money directly from the business account to pay expenses. You can set up the same for your businesses. Keep them separate.

 

Rule number 3: Taxes are separate in each business. You must pay the self-employment taxes on each venture. If you are a sole proprietor in the US, you will have one EIN if you are operating with your own social security number. You can make a single tax deposit online to cover the taxes for all three, but you must keep withholding separate in your tracking. You must file a “Schedule C” every year for each business that you own as a sole proprietor on your taxes.  If you are an LLC, Limited, Corp or any other structure you must absolutely deposit your own taxes but let your accountant do the K-1 filings at the end of the year.

 

It doesn’t have to be complicated for the multi-passionate entrepreneur. I sit down and handle each business separately and in turn. I have a written spending plan for each, and the B-number that goes with them. I spend less than 1 hour a month on the financial planning and management of the companies.

 

How to do it:

 

  1. Have Your B-Number. Know your B-Number for each business separately and have a written spending plan for each. I’ll say it again, know your breakthrough numbers and have a plan for the money in each business. If you need to calculate your breakthrough number get the free workbook at entremoneycoach.com. This step will save a ton of stress and crazy. You know what you need to make, what you need to pay, and where your money is going.

 

  1. Use color coding. I have different colored folders for each business. I mark receipts as I have them and place them in the correct folder by color. To avoid payment errors, I have checks in different colors with a little icon in the corner. Color coding keeps everything easy and organized. You can find different colored folders at any office supply store.

 

  1. Delegate what you aren’t good at, or don’t like to do. Stay organized with a virtual assistant, bookkeeper, accountant, etc. The actual bookkeeping for my businesses is very straightforward, and I don’t do it, and it takes less than 3 hours a month for all the businesses. I only manage the income and planning.

 

  1. Always have a plan for your money. Don’t let your money run off and spend itself. Know what each business’s income is for. Your money every month needs to have a purpose. You may decide to take a salary from one business, with the intent to use the money to grow a different one. Have a plan, withhold your taxes, and use your money strategically.

 

I celebrate multi-passionate entrepreneurs like me and understand that being organized can sometimes be a challenge. But take these few steps above to make managing the finances across multiple businesses easier. Happy entrepreneruing!

Guest Blog: We Lived the Workaholic Entrepreneur Life- Never Again

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by, Mike Kennedy

In April of 2011, Dawn and I decided to risk it all and start UNEQ consulting. I had spent the previous 14 years working at the Army’s Maneuver Battle Lab as an Experimentation Manager in the Unmanned Systems Team. My team and I conducted experiments with small unmanned aircraft systems, commonly referred to as drones, and unmanned ground systems, or ground robots. I loved my job; was very good at it; and had earned a great reputation in the unmanned systems community. But still, every day I got up and went to work at a government agency. Bureaucratic BS prevails at all government agencies and that was the part of the job that was troubling me. For months I had a nagging feeling that I was faced with a choice; succumb to the bureaucratic BS, keep my head down and just keep going; or resign my position and go do something else. I was making a six-figure salary, got to work around soldiers a lot, and my work helped to make their lives better. That was the good part. Putting up with the bureaucratic BS was the bad part. Go do something else won out and UNEQ Consulting was born. I closed my 401k, sold all my stock options, and away we went. Dawn agreed to keep working her job with the Army for the time being.

We thought briefly about renting some office space but after careful deliberation decided it was best to work from home. In the beginning, it was great. We had offices set up downstairs and called it the world headquarters of UNEQ Consulting. It was fun. I got to work in my pajamas most of the time and never had to drag myself to the car and drive to work. The first year we took a loss, but the second year we made more than $200,000. The problem with working from home, though, is that you are always at work. Soon enough, when the dogs got me up in the middle of the night to go outside, I would start working. From 2 or 3 am until 8 or 9 am I would be at my desk. I would take a short nap until 10 am or so then get back at it.

The thing is most of that work was just busy work. I was chasing clients. We had contracts with Georgia Tech Research Institute, the Defense Advanced Research Projects Agency and several companies that developed unmanned technology for the Armed Forces and/or First Responders. We were making great money, but I was working 16-18 hours a day trying to get more contracts and was spending near zero quality time with Dawn and the kids we still had at home. It got worse when Dawn’s contract with the Army expired and she started running operations for the company. Her work was invaluable; a definite asset, and truly made a big difference. That wasn’t the problem. I had become an obsessed workaholic jerk. Obsessed workaholic jerks find a way to manufacture arguments and fights over things that are not important. That was me and argue and fight we did. What’s worse than becoming an obsessed workaholic jerk? Knowing that you are one and not caring. I would tell myself that things would get better with Dawn and the kids when we were making millions and none of the fighting and arguments would matter then. For our third year we were on track to make $375,000, then the best thing that has ever happened to me happened.

On Friday, November 1, 2013, my two oldest sons and I were planning to spend the day at our training site getting ready for an event with first responders that was scheduled for the next day. Kevin, Patrick and I went first to a local tire store so Patrick could get new tires put on his car. Patrick was going to catch up to Kevin and me later in the day. Kevin and I got to work and a few hours into it, I climbed a ladder to about 18 feet to hang something on a light post. That is when the best thing that has ever happened to me happened. I fell off that ladder, fell the 18 feet or so and landed on my head on concrete. Wait- that doesn’t sound quite right, does it? How in the world can falling off a ladder and landing on your head on concrete be the best thing that ever happened to anybody? I’ll tell you. In the second that it took to fall that 18 feet, UNEQ Consulting died and with it, so did the obsessed workaholic jerk.

Of course, I am not actually dead. But in that second I went from obsessed workaholic jerk to helpless guy with 4 skull fractures, severed VIII Cranial Nerve, diffuse bleeding in the brain and catastrophic Traumatic Brain Injury who would spend the next 2 and a half months in the hospital learning to walk again. In that second, UNEQ died, the obsessed workaholic jerk died, but our marriage was saved. We wouldn’t know that our marriage was saved until a few years later because I had to recover and learn how to live with hearing loss, Oscillopsia (google it), swimmy brain, and getting to know the new Mike. That was extremely frustrating. Looking back now though, six and half years later, it is clear the accident saved our marriage.
Now, I sometimes think about it all and reflect. UNEQ probably would have gone on to make the millions of dollars I was obsessed with reaching. But, more likely than not, Mike and Dawn would have divorced, and the obsessed workaholic jerk I was would be all alone. That, my friends, is not worth it.

Here are the things I want you to take away from reading my story:

1. If you are working 16-18 hour days and not spending quality time with the people you love and who love you- you are a workaholic. Stop. It is not worth it.
2. If you are working 16-18 hour days, work is all you think about, and you know you are not spending quality time with family- you are an obsessed workaholic. Stop. It is not worth it.
3. If you are working 16-18 hour days, work is all you think about, you know you are not spending quality time with family, and you are fighting with them- you are an obsessed workaholic. Stop. It is not worth it.
4. If you are working 16-18 hour days, work is all you think about, you know you are not spending quality time with family, you are fighting with family, and you don’t care- you are an obsessed workaholic jerk. Stop. It is not worth it.

Finally, running your own business is only worth it if you keep the reason why you are building your business in the first place, front and center. You want a better for life for your family, you want your business to impact a lot of people and change the world, but what good is all that if you lose yourself and your family in the process?

The Art of the (Little) Pivot

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The concept of the business pivot is not new, I learned about it several years ago when I was in the Syracuse University V-WISE program for women veteran entrepreneurs.  Traditionally a pivot is a term to describe a strategy to turn a business when the current business model isn’t working, a plan “B” if you will.  But I also see a pivot as a strategy that can aid expansion of a business. I don’t think a pivot is only a plan B, but can be a business strategy for small turns, little twists that steer the business to look in an additional direction.

 

Entrepreneurs are, by nature, change agents. Known for figuring out ways to do things better, ways to take calculated risks. We are also known for continually searching for the “next thing.” I believe that using a simple pivot analysis can help you find the next move for your business. Again, I don’t ascribe to a pivot as something to do only when things are going wrong. I believe that a little turn deserves a pivot analysis, so risks can be weighed in a structured, but simple, way. Use this three-step process to discover your next business move.

 

  1. Commit to use openminded and unfiltered brainstorming. For best results, use the recommendations by Jennifer Jackson of Lucid Chartand just get every idea down on paper, and edit later.

 

  1. Use the Entre Money Coach ADFP Formula. Ask open ended questions about your Audience, Delivery, Focus, and Processes for places to improve, serve, and expand. Get the Free ADFP Process and questions to ask by visiting> here.

 

  1. Use market research to explore ideas. Don’t just throw out unusual ideas as bunk. Do a little market research to see if there is a fit. There are all kinds of free resources online to help you. Don’t forget to look at adjacent industries and at your own industry for ideas and changes going on that can support your ideas.

 

Some of the best business moves are those that seem to be a natural twist or progression. A pivot doesn’t have to be dramatic to impact your bottom line positively. Happy Entrepreneuring!