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The Wellness Creator Podcast is your go-to source for expert insights and actionable tips in the evolving world of health, wellness, and spiritual-based business. Join us as we explore proven online growth strategies, chat about current trends, and interview fellow wellness creators who’ve managed to turn passion into profit by helping people live better, healthier lives.
Jeni (00:34)
I'm Jenny Barcellos and I'm joined with my co-host, Sandy Connery. Hey, Sandy. Hello, Jenny. Hi, everybody. So this is the third episode, I believe, in our Financial Intelligence series that we're running right now, all about knowing, understanding, and focusing on the numbers in your business so that you can grow that business into something big and meaningful.
So Sandy, this whole series is really your brainchild. And why don't you tell us a little bit about why tracking our numbers is so important? Well, just like we've named the episode, what you track grows, I really believe that to be true. when you watch something, it grows. And if you pay attention to it, it just sort of brings it into your mind. You see things that might inspire you. You might get ideas around something. So if it is buried and not visible and not in your
consciousness, nothing happens to it. So when we talk about business and growing it to something significant, I think we need to figure out what are the metrics we want to look at. We want to look at those frequently and what you track will grow. I promise you it's like a business law, I think. Well, you know, we really started doing this, I feel like very consciously over the last year or 18 months. And I certainly have seen the growth shift in our business, you know, along with a lot of other levers that we've pulled and things that we've done.
but I absolutely think that it matters. I think when we first start out, I talked about this, I think in the first episode in the series, it's for some of us, there's shame associated with small numbers. And when you're first starting out, I just want everyone to know that small numbers are what everyone has when you first start out. Like everyone starts at zero, every business starts from scratch. And so every dollar, every penny that comes in, you wanna appreciate and focus on that money and appreciate the fact that you earned it in your business.
and figure out what you could have done better, sure, but what can you do moving forward more importantly? And the more you analyze and understand how you made that first dollar, the easier it is going to be to make your next dollar or your next hundred dollars or your next hundred thousand dollars or your next million dollars. I think we've said this in every single episode, but it's worth repeating that those numbers are a fact, they're data, they are neutral. So they are not an indication of how well you're doing or
any question of worth, it is just a number. And it only brings up emotion for you when you attach a thought to that number and you think I should be doing better. Nobody likes me. Nobody wants the stuff that I'm making or whatever. So it's just, again, it's neutral. They are a data point. You are going to start to see patterns and you have to really monitor your thinking around the numbers to not send yourself into some negative spiral. So we do want you to track your numbers and just
be the watcher of your mind when you are taking a look at these numbers and don't send yourself into places you don't need to go. Absolutely. And we absolutely use this tracking, this monthly check-in as a ritual in our business. We've mentioned this before. It's this sort of sacred time that we have each month. I really look forward to it. Where we focus on, we analyze what worked, what we could have done better. And we definitely try our best to celebrate everything that we did over the last month. And the numbers.
aren't the only way to celebrate. You can celebrate in other ways. mean, human connection, things you can't measure as easily, but numbers you can measure. And so it gives you this very concrete element in your business to track and focus on every month. Okay, so let's dive into this tracking. And I wanna separate this into two different areas. So the first one is straight up bookkeeping, which most of us are familiar with and all of us have to do. Bookkeeping is done for your accountant and for taxes.
So there are some basic things that you need to keep track of to stay within the law. So let's talk about bookkeeping first, and then we're gonna talk about other business metrics. And we're actually gonna share all the things that we track, not because we think you should track those exact things, but to give you an example, just to give you an example of what we do and to inspire you to think about your own business and what those different metrics should be. Okay, so let's talk about bookkeeping. So,
When you do your bookkeeping, you need to report to your accountant for tax purposes, your revenue, your expenses, and you need to be able to identify what those expenses are. think we talked about that in an earlier episode. So you can do this yourself manually, taking a look at your bank statements and your credit card statements, which is not advised. You could also hire a bookkeeper. they would take
those statements and they would go through each and every transaction and label it and categorize it. Or you can use software. And so there are a ton of different software tools and platforms on the market for bookkeeping. And we wanted to talk to you about Bench because we are in love with Bench, but it's only for the businesses in the US. We wanted to give you a couple options if you did not live in the US.
Yeah, and I use QuickBooks. I know you use FreshBooks, Sandy, for your other company, and I use QuickBooks online for my other company. We have so many transactions being processed through our business every day that it makes sense. And this is not like talking about processing our customers' transactions. I mean, these are our transactions, whether it's money in or money out.
that it makes sense for us to have a dedicated team or individual focusing on our bookkeeping. I certainly don't have been within my life to do it. And I know you don't either Sandy and wouldn't want you to have that job. But for our other businesses, we both have other companies and they function in such a way that it's not a big deal. The numbers of transactions that go through, it's not such a big deal for us to do those ourselves. And for example, for my other company,
Once a month, I just go through QuickBooks Online, which is set up to my payment processor and my bank account. And I just go through and it takes me maybe five or 10 minutes a month to go through and sort of reconcile and check categories for what the software, because it's kind of pseudo AI. feel like it gets smarter over time. So once you have the same kind of vendor and you've categorized at one time, you have a charge coming through the next month.
learns the charge and it learns how to categorize the expense. And I don't know if that's how FreshBooks works also. both FreshBooks for one holding company and then I use QuickBooks for another. So I actually use three different ones. Yeah, it's very similar. I actually find the user interface of FreshBooks much easier than QuickBooks. It's just cleaner somehow. I think QuickBooks came from some very old school, know. Quicken or something. Yeah, like it's old, but it's getting better. My accountant now
He used to recommend the QuickBooks, like the desktop version. And just in the last year, he says that QuickBooks online has improved dramatically. I still find it hard for my brain to go through, but I do love that you can like all of the transactions that come out of your account expenses, they're labeled and the vendor, as you said, is pulled. And then you get to say if that's right or not, and then you can categorize it and it will remember. the next time a charge from that vendor comes through, it will remember that that's a travel expense or whatever.
It is good in both of these platforms. You can also invoice in. if I don't know if you want to invoice for clients or something, you can do that and you can track that that invoice has been paid. Also, if you are working for a client and you have like multiple, like you have a bunch of expenses on behalf of another client, you can flag those and it will create a whole invoice with multiple expenses that that one client needs to that you can build that client. So there's little things like that that are very helpful. So any beginning business in that first
couple years, think, FreshBooks or QuickBooks, which work both in the US and in Canada. And I can't speak for Europe or Australia or New Zealand, unfortunately, or the other countries. But FreshBooks, QuickBooks works for both US and Canada, which is nice. And I'll just say a note about Manual 2. If you're just getting started, that may be OK. I know the first year that I had a consulting company, I was doing maybe less than a dozen consulting agreements.
a year, I just did everything in a spreadsheet. I just gave that to my accountant before taxes at the end of the year, and that was totally fine because it wasn't worth it for me to pay for any software at that point. So you just have to evaluate what kind of business do you have and how many charges and expenses and payments in and out are you actually experiencing? Because if you have less than 30 transactions in your business a year, you can probably just do it in a spreadsheet, no problem.
Yeah, it gets messy when it's like if you do a membership and you have a whole bunch of charges coming in, right? That's really hard. No, I was doing like $40,000 contracts and so I didn't have that many in a year when I first started. So it was fine. But yeah, if you have an online business and you have any kind of passive revenue or, you know, products that are under $1,000 or something, you probably don't want to manually track your bookkeeping.
But I just think I love that you've broken it down into these four options, which are manual, hire a bookkeeper, a tool like Bench, and then software tool like FreshBooks or QuickBooks, because it gives people a sense of they can look at their needs and what kind of business they have and then go from there. with nonprofits I've worked with, it's often a manual bookkeeper because there are kind of interesting, complicated ways you need to track allocations for grants and that sort of thing. so...
There are times where it makes sense to have a human being do all of that because they have specialty, they have specialized knowledge and understanding. And certainly software tools are great also for organizations like nonprofits, but you may want to have that human interface as well. And Bench is also like that for us, it's a really smart software tool, but there's a human being that manages our account. So you just need to think about where you are, what stage you're at in your business and what makes sense, like what kind of time you have and.
whether it's not worth just throwing some money at it. Yeah, I think that bench is so interesting because the other two like fresh books and quick books, it does take hours of my month. Like I really do have to sit down and go through and make sure all the numbers are right and that everyone's billed and that it's all accounted for and labeled. And so it does take me many hours a month. And then with Marvelous and bench, it's like zero hours a month. The only thing that we get to do is I log into bench and I have like pure joy looking at the PNL instantly. And I have
You know, I know that somebody is watching and if something doesn't make sense, they tag us and they ask us the question like, what is this expense for? This is a new vendor. Like, what is this? Like there is zero stress with bench and bookkeeping. I love the platform a hundred percent, but you have to be at a certain level to warrant it. But the fact that there's somebody, Jenny, that's watching the books and the numbers and the charges fly by and they're watching. And if there's anything that's out of the ordinary, they will let us know. So it's like the best of both worlds.
Okay, so let's talk about the advantages of bookkeeping software. Well, I think first that all the transactions are automatically, magically brought into the software. So you can see all money in and money out right there. It's just line, line, line, line, line, line. So you are not entering bought a notebook for 9.99, you know, business supplies, like you're not doing that. It's doing that for you. So right away, that's like a ton of time saved.
That's really nice. So for my other business, I collect sales tax. And so I have to pay quarterly sales tax to the state of Washington, for example. It's, you know, maybe 30 minutes a quarter. I just go in to QuickBooks and I run a report and it like calculates all the sales tax that I need to pay. It's so great. So it calculates the sale tax that I've collected. just like enter the date range. I hit Q2 or whatever I need to do.
And then it gives me the number then when I go online to the state to pay the sales tax for that quarter, I just enter the amount that I got out of QuickBooks and then it calculates and figures out what I need to pay the state. And so there's that kind of stuff where like, I can't imagine that I would have to sit there because I sell things that are like $25, you know? So it's so many individual tiny little purchases for that other business that I'm collecting sales tax on and it's nice. And you can look at where the transaction took place.
which is great because you pay in different counties, different tax rates. So I love being able to use a tool like that. That's a little family business that is mostly seasonal. And it certainly doesn't warrant hiring a tool like Bench to pay monthly because there are months of the year where that business is almost dormant. I mean, we do online sales as well, but our big months are in the summer. And so I just think, again, you have to look at what works for you. But if you need to run reports at all, if you're collecting tax,
I really would not go the spreadsheet route. I would go the route of a software tool for sure. And the P &L report, which we talked about last episode, just instant. Yeah. Instant P &L. That's so lovely. Yeah. And then everything is auto-categorized. I think we've dealt with that, that as they come, it knows that this vendor is traveler. This vendor is a business supplies or whatever. So that is just auto-categorized, and it learns over time. Yep.
No, it's great. And it's easy to look through your expenses, notice if something is amiss.
So Sandy, you do some stuff we're about to talk about in a minute. You do some stuff manually.
at the end of each month and then we go through it together and it's easy to just go into bench and grab those numbers. So let's maybe dive into how we do our monthly tracking. I think that's probably why most folks are listening to this episode. They wanna understand how they can track in their business the numbers that are meaningful so that they can help to grow those numbers. Yeah, so let's start talking about tracking sales. So we actually do this.
We have sales goals, let's start there, sales goals annually, quarterly, and monthly. And then as the year goes on, we will enter what the actual numbers are. So we have one column for goal, and then we have one column for actual, and then I also calculate the difference so I know how far ahead or how far behind we are for each of those time periods. Those numbers I take from Stripe, so almost daily I go in and add whatever Stripe.
sales we have month to date. I add that to our spreadsheet. we have, so I know Jenny doesn't look at as much as I do, but I have in my spreadsheet, a running number and I can look back at past months and years. So I know exactly where we are. It's almost a bit of an obsessive tendency to be honest. I didn't know you did that every day. Yeah, absolutely. man. The things that come out on the podcast. Yeah. No, that would make me crazy, but I'm glad you're watching them. I mean, I appreciate it certainly. And I think that it's so true that I noticed like, okay, we're,
X days, X percentage into the month. so either we're over our goal or we haven't, it looks like we might not meet our monthly goal. We can then make decisions about, you know, doing a flash sale or doing a new offer or sending an email to a segment of our list, offering something special so that we can make sure that we're keeping to those goals month to month, quarter to quarter so that we ultimately reach our yearly goal. That's the part. It's not like passive, like, I'm down.
$5,000, like I wish somebody, no, it's like I'm down $5,000, what am I gonna do? Like that's the power of understanding your numbers. Like you can either go, oh crap, I'm down or oh crap, I'm down, what am I gonna do? Right? And there's a huge difference in attitude there and thinking behind that. I just wanted to say that to go and you actively have to go and get those numbers out of your Stripe account as they are happening in real time. I think that there is no platform out there, that has a dashboard that is gonna satisfy all people.
In my previous life with the shoe stores and clinics, we actually had a controller who's a hundred percent full time just did our books and he would give us monthly reports, like all our financials at the end of the month. There's no way that I could wait until that. wanted to see like, so I had my own spreadsheets of tracking all the sales throughout the month and I broke it up into categories. So you really need to be an active participant in this and
take what you need and maybe it's just three or four numbers in the beginning, but take what you need so you can start to watch your business. But sales, mean, that's the obvious one, have a goal and then be entering what it actually is as you go throughout the month and year. Yeah, I just also wanted to add, in addition to sometimes if we're a little bit behind on a monthly goal where we make a decision to do something special, we also have had months where we were far surpassing our goal and we were close to reaching some sort of higher milestone that we hadn't even envisioned for ourselves.
And then we make a decision like, wouldn't it be nice to hit x dollar amount this month? Like, what could we do to get there? And it creates a problem to solve. It creates like a fun, it's almost like gamifying. It's game. Running our business. like, OK, interesting. What could we do with this information? And you have to have time in your business to be able to take that stuff on, for sure. I would say just think about ways where you could take this data and use it creatively to make decisions. you'll be surprised at what you're capable of.
just by being creative about what you could do, knowing the numbers you have so far in a month or in a quarter or in a year, and giving yourself a challenge. And I think we mentioned this point previously in one of the other episodes is, but we also look at month over month. So once you have at least one year of data, you want to compare January to January, February to February, because of the seasonality of so many of our businesses. So I like to have the previous year on my spreadsheet so I can see and I can.
do that little calculation of like we are 110 % over last January. So I pull in old numbers. know a lot of accountants will only have the current year, but I always want to see the previous year as well. Okay. And then we're going to talk about breaking up the sale. So this is maybe not something you'll want to do right away, but when we have our sales, I like to see
What made up that sale? So obviously we have monthly plans we have annual plans So I'm going to get a unit number of how many annuals did we sell? How many monthly plans did we sell? And then the same for inner circles. So we have our higher tier where you can pay all at once, or you can pay in a 12 pay. So I want to know how many units of the 12 pay did we do and how many units of the full price annual. And if you do courses or if you sell retreats, like what are the specific products that you are selling?
to make up your total revenue. So I like to break it out. Maybe you've only got one product and that's nice and easy, but as you start to grow and have different products and even payment plans, like I wanna know, like what percentage are people paying in full versus choosing to do the 12 pay?
Yeah, I would also say too that you want to make sure you have revenue goals for each of your products or your offerings. So it's not just enough to say, you have only one thing, awesome, you have one thing, that's your focus. But once you get to the point where you have multiple offerings, you want to start to project and break down your goals based on each product offering that you have so that you can start to see like, well, this thing is making more money than I expected and this thing isn't. So maybe I'm going to change.
my behavior to devote more time in my marketing or in my business in general to this offering, because that's where I see growth. So those kinds of breakdowns are really important. You know, when you're first starting out, you don't know, you don't have data from past months to go ahead and have a basis for your goal. So you kind of have to pull your goal out of nowhere. And that's okay. Just know that it's important that you iterate on that goal. Don't just like say, I'm going to make $200,000 this year, but then not.
have that grounded in reality and be disappointed if you're not on track to do that because you made that number up, right? So it's important. You have to make it up when you're first beginning, but then you also have, as you get data, you have to start to actualize that number in real life. And we also do Facebook ads. And so we track very closely how much we spend on Facebook, but also like how much money is coming in. And that includes what we physically have into the bank, which we call banked and how much is owed to us, which we call book.
So those are two very, very important numbers and because Facebook ads can get expensive very quickly. So we really want to track these extremely closely. Yep. We need to know our return on investment to know whether ads make sense for a given product or program and whether they don't and where to pour more money and where to pull back. And I think we track that weekly. So if you are running paid marketing campaigns, I hope
that you have a spreadsheet for tracking this information, you should know your cost per lead. You should know the cost to acquire a customer. You should notice if that number is going up or down week to week in order to reallocate your funds. And again, you need to get some data built up, but even after running one month of ads, you should start to be able to have enough information to make really informed decisions. And then the other big number I want to know is like other expenses. So on the P and L, what are they all the expenses?
We also want to know the wages. So what are our wages? Because we always want to keep the wages in relation to our gross revenue. So I actually do a calculation and we always aim in the 20 to 30 % of wages to gross. And that is tricky. And as you grow a team, this is a great number to have to make sure that you can afford them. And when I had the shoe stores, we would, we're always fighting that number and you had to watch like how many hours where people
how much staff did you have on the floor because that would affect how much revenue or how much you paid in wages and would affect that ratio. So for us, it's pretty straightforward, but we do try to keep it into the 20 to 30 % of our gross goes straight to wages. And we're going to talk a little bit more next episode about wages and profit.
And then for us, we watch very closely software development costs. That is a really key expense for us. Most of you are not going to have that, but what is that number one thing that you should be watching? Is there an expense that you really want to make sure that you have your eye on? And then of course, ad spend, which we've just talked about. Okay, so that's sort of sales and revenue. Let's also talk about metrics that we watch as far as that indicate to us our business performance.
they're not about numbers or it's about money. They're about things other than money, but numbers other than money. Yeah. So what do we track? Sandy, we track, and this is again, really specialized to our business, but we track the total number of active teachers, the total number of users on our platform. We track churn, which is the percentage of people who leave, who are on a membership option in our business. So those are typically monthly software users. We track
how big our email list is each month. We track our Instagram followers. We track our Facebook page and group numbers. We track our podcast downloads. We look at Google Analytics and then the equivalent that's inside of Squarespace for our Squarespace-based sites in terms of visitor numbers, who's visiting, how many unique visitors do we have, how long are they staying on a page. And we just input, it takes us, I don't know, half an hour to do all of this each month, I would say, to kind of go through all these numbers.
and we just track it all in a spreadsheet. And it's really helpful because a lot of this information, especially around social media or analytics, it's not as easy to get past information. So for example, I don't know where you would figure out, like what were your number of Instagram followers in April of 2019, right? Like unless you wrote it down at the end of April. So you wanna start to really.
have a place where you can keep this information just so that you can know your own growth, like where you're stalling out, what's working, where did you have a particularly good month? What did you do in order to get a bunch of podcast downloads that month or a bunch of YouTube views that month? Like, what did you do differently? If you're not looking at this stuff, you're really shooting from the hip in your business and making decisions whimsically. And I love whimsy, but not when I'm talking about my business.
And the other thing I'll do is in this spreadsheet, so if we see like a bump in podcast downloads, let's say, I will put a comment on that cell. So if I'm like scanning it next year, like looking back and like, my God, why was it so high? And I'll put a comment like we doubled the number of episodes or whatever the situation is. So can look back to see what that bump was, like what we did. And same with sales. I'll often, if we have a really high month, I'll put a comment in that cell and say, we sold
10 of these and 20 of these or whatever it may be. So we can make sense of those numbers. that kind of stuff you are not going to get. That's customized numbers. This is customized spreadsheet. Like you need to make this work for the way that your mind thinks and the way that your business is set up. Like we've used the words of our business, like teachers and users and churn, but maybe you're just like students or clients or a number of hours that I spent coaching or whatever.
So I really want to inspire all of you to sit down with a spreadsheet. But it's easy to do. You can just open up a spreadsheet and start naming the columns and putting January to December down the left-hand side. Yeah. And just
Set a calendar alert in your Google Calendar in your paper planner. Just write it down. The first of each month, you're going to go through and do the numbers of the previous month. And so it's just a nice ritual to do this. And if you don't do it exactly on the first of the month, it's fine. It'll be roughly correct. Some of these numbers are easy to grab just for a certain date range. And some of them you really do need to go in and grab in real time. But just make this part of the ritual of running your company.
just starting to get familiar with tracking this stuff. You as the founder or the CEO of your business need to be intimately involved in these numbers. And there's probably numbers that we don't track that make sense for you to track. You have a different business than us and we're also not perfect. Like there's probably other stuff we should be tracking that we don't. It makes sense for you to go in and pay attention across all of the various aspects of your business, both in terms of the financials, but also in terms of the marketing efforts.
and the visibility efforts and whatever else. Like if you're a person that's constantly writing guest posts on blogs or booking yourself on other people's podcasts, like I would have a column for that. Like how many podcasts was I on this week or this month? And how many guest posts did I blog this month? like just think about like where are you focusing in your business? And those are the things you need to be tracking. I love the idea of the business ritual and it's actually really fun. So encourage all of you to jump on board.
Can I play my singing bowl for a second? Because you said the word ritual so many times. I want to ding my singing bowl. Right now on the podcast? Live on the podcast.
That's seriously, it is about setting a real ritual and setting some space for yourself, creating space for your business to actually focus on growth. And I know that that is like super woo to ring the singing bowl, but I just want to say like, this is how we do it. We also have our Oracle cards and we have our singing bowls and we have our Sage and we have all of the things that we have, the candles. This is just a gift to give yourself. Like I think to take
the fear out of numbers and the sort of like the, I'm trying to think about what it is. Like what is the feeling like typically that you get when you think about bookkeeping and financials and numbers and taxes will dread, also just like it's, it's impersonal and it's inhumane. It's not, it's not feeling it's more thinking. And we want to take that from being something that is just super analytical and dry and boring and turning it into this sacred ritual. Cause that's what we're all about. All right.
I think just looking into those things in our lives and our businesses that are a little bit more tricky or more dark or more inhumane on the surface is where you can start to make a difference. And so I just encourage all of you to take on the ritual of looking at your numbers. It's a really fun part of our month. And I think you'll be pleasantly surprised with the outcome once you start to really commit to this. So we'll be back next week with another financial intelligence episode. And we look forward to seeing you then.
Alright, thanks everyone. Bye bye.