Jeni (00:34)
I'm Jenny Barcellos and I'm joined with my co-host today, Sandy Connery. Hey, Sandy.
Sandy (00:39)
Hello, hello everybody.
Jeni (00:41)
In this episode, we're going to talk about something that makes many of us uncomfortable, but we're here to tell you why it shouldn't make you uncomfortable. And that is, in fact, knowing and understanding the numbers in your business.
Sandy (00:53)
think this is perhaps not a subject of great interest. It's not super sexy, but it is so, so, so important to, as an entrepreneur, to understand the numbers, know what's important, know what you need to be looking, know what you need to be tracking. And I see just recent conversations that you and I have had with some of our clients. We see that there's a lot of terror, a lot of dread, and I want to change that. So we're going to do a whole series on understanding your numbers, how not to be afraid.
what you need to do and why this is so, so important.
Jeni (01:25)
And I really want everyone to walk away from this episode in the series, because in fact, this is an entire series on financial intelligence. I want people to walk away from this series, no longer feeling fear or shame about the numbers in their business. And I think that's something that I felt for a long time, just like our company wasn't as big as I wanted it to be for a long time. so therefore, rather than confront those feelings and work through them.
it was about sort of just hiding from the numbers themselves so that you didn't have to think about them. And so that's no longer the way we run our business. And so we're here to sort of share that experience with all of you and talk about some actionable steps you can take so that that same issue doesn't occur for you in your business.
Sandy (02:09)
Right. So let's set this up. I see a lot of women in particular, as you just said, avoiding looking at their numbers. I hear a lot of women saying that they don't know, they don't understand, they're afraid of spreadsheets. And this is just crushing to me because you will never have any amount of success if you run away and hide and bury your head in the sand from your numbers. So we are asking everyone to be
a grownup adult about their numbers, not to play victim, not to feel fear around this. And we're going to talk about mindset in a second. I don't want people to be scared of the numbers. And I think that, you know, there's that sort of princess syndrome where it's like, someone come save me. Someone come tell me what to do. Someone please interpret these for me. And no, like if we want to help women achieve success in their business and in their lives,
It starts here by first taking the action to create the business, but then it's like, get really comfortable with a spreadsheet and get really comfortable with your numbers.
Jeni (03:14)
Absolutely. And what we really want for you, for any of you listening and all of you listening to this podcast, is to achieve financial security. And for some of you, that means that you have enough of a buffer in your finances that if something catastrophic were to happen or unlikely to happen, did in fact happen to you, that you would be OK for a period of months or even years. And for some of you who feel, who have more of a mindset towards
Safety and security. I really want you to know that financial independence is possible for you So financial security is sort of this idea that there's a buffer and that you're going to be safe if something bad happens But financial independence is a whole other step forward and that is essentially that you don't need to rely on anyone else So any employer or any other person in order to live your life that you are essentially in a position where your business
either your passive income and or your business supports you for the rest of your life. And we're here to tell you that that's entirely possible. We don't talk about this on our podcast very often, but that's ultimately the goal that we're working towards and that we want all of you to be able to have if you want it.
Sandy (04:25)
Yeah, and I don't know that women, I don't think they dream big enough. I don't think there's enough bigness. know, like I think, why not you? Like even if it's part-time, even if you have many children, it's all possible. And I think we learned, so much from our, series, the Women and Money series we did in the spring. And so many new conversations have come up from that. And I think this is part of that. Cause for me,
you know, talking to all those people that we interviewed, I realized all of the money mindset issues that I had, and it was a lot of like holding on and not wanting to spend in case something happened. And now I've shifted to, no, I'm going to take a hundred percent control of my money, make really smart decisions and understand completely how it is working for me in the background. And so yeah, that's where this series was born.
Jeni (05:15)
Yeah, absolutely. think we both had some big epiphanies in recording those episodes. And I also think that we have taken a lot of risks in our business in the last year. And part of that has been risk within making certain investments. And they've really paid off. rather than just sort hoarding every penny that came in, we've really strategically invested the resources and the profit coming into our company in order to have and achieve, think, what we would have thought last year were
impossible results. And so I think that that's also given us the courage to come forward and start to talk about this and what it looks like to really confront the money and the numbers in your business so that you can make really smart, educated, informed decisions about what to do with that money moving forward. Because the truth is, is just sort of sitting back and hiding. You'll never achieve financial security or financial independence. And if you're willing to take a hard look,
at your goals, at your numbers, at your projections, at the breakdown of your profit and loss statements, you'll be able to start to play a role in achieving the life that you want to have and the business that you want to have. So let's go ahead and confront that. Let's dive in.
Sandy (06:25)
to
start with number mindset. often say money mindset. We say that all the time, but we're talking about number mindset. And so I think you sort of said it earlier really well, Jenny, that you were, you know, shame about our sales or embarrassed or whatever. And I want to start by saying, like, the way to look at your numbers is that they are 100 % neutral. If your sales are $500 a month or $1,000 a month or $100,000 a month, that is simply a neutral fact.
There's no judgment on your worth, whatever your sales are. There's no judgment on how good you are or how valuable you are. They are simply a number about your business. That's it, a mere fact. And so the trick is to like take a look at that number and ask yourself what you feel about that, what you think about that. Like when you look at your sales, what is that first thought? And then recognize how you feel about your business is based on that thought.
So when we look at our sales, our mind will spin a thousand stories. So we will say that, you know, I'm not very good at what I'm doing. Nobody wants to buy my stuff. No one's understanding what I'm doing. Like you will, our minds will come up with a hundred stories about why that isn't enough. And so the numbers, they don't lie. They are simply a number on a piece of paper. And it is our job as an entrepreneur to check ourselves and be the watcher.
of what our minds are saying about those numbers. Because if you feel like, my God, this is awful, I'm not doing very well, I'm not meeting my goals, you're gonna feel terrible in the actions that you're gonna take with those feelings are not gonna get you anywhere positive, right? You're gonna get stuck, you're gonna be stuck in overwhelm, you're gonna feel stuck in shame, you're not gonna take any kind of results. So I really encourage everyone to examine their feelings around their numbers and recognize the result that they're getting.
And for most of us, it's probably not the right result because we're spinning in like, ugh, this isn't where I want it to go or want it to be.
Jeni (08:30)
Yeah. And I think that this also kind of plays into manifesting and celebrating your wins and your sales too. So I know that for us, for a long time, even though we had sales coming in every day, there were years where it was just still like dread was associated with everything, right? Because it wasn't like hundreds of thousands of dollars a month, which is where I wanted us to be.
That's a lot for me to say out loud even on this episode, to be willing to admit that. But to get to the point where every single sale, every dollar, every penny that's coming into the company, you're willing to take a real look at it, to acknowledge it, to be grateful for it, to celebrate it, and then to have, again, that honest conversation with yourself and your team about what it takes to get to the next level. As long as you're just sort of shamed or
hiding in any way, it's essentially impossible to build and grow.
Sandy (09:29)
It's 100 % impossible. And we hear, certainly in wellness, I've actually just recently heard a couple of podcasts of people say like, I avoid my numbers, it takes me out of the creative process. And you know, I got to question that. I really got to question that because if you don't have your eyes on a goal, it's really hard to get there. And it's really beautiful and lovely to say like, I don't look at my books, I just sort of work creatively and impulsively and intuitively.
But I honestly don't think you can get there. We heard an interview recently and the woman was saying that, it was her husband. She says that in the books, but her husband is in them 100%. So there was somebody that's from her family that is watching the numbers and making sure that the money is there and growing.
Jeni (10:16)
As a feminist, that made me very upset to hear that.
Sandy (10:19)
Right?
Okay, good. Because I was like, no, like, you can't, you know, I just I don't buy that. I think it's bullshit. think you need, regardless of who's running your company, you as an entrepreneur, as the owner need to know you absolutely need to know.
Jeni (10:32)
No, I agree. It's part of the responsibility of having a business is being willing to, at least once a month, look at your P &L and evaluate whether the decisions you made that month were aligned with your goals or not. I mean, I think you have to be willing to take a few minutes and do that. And we'll talk about this more, I'm sure, in this series. But we spend a good chunk of time at the end of every month, or really the beginning of the very next month, looking at our numbers from that previous month.
not just financial, but across everything, right? Like we evaluate what we measure. We discuss where we had significant growth and where we didn't across like page views and like SEO results and social media, like like every single thing we study and dissect. And we didn't do that for the first few years, but I found that the more we look at it, the faster and bigger it grows, right? Which is.
Sandy (11:25)
Yeah, what you pay attention to will grow 100%. Yeah. Yeah. And I think Jenny, I want to go back to that point you said about how we celebrate every sale. Because literally, every time someone joins Nomad Dream or joins Inner Circle or buys Beta Launch Lab, we message each other and go, new customer or new client, new teacher. We celebrate every single one. Like every single one. And so that feels really good. so maybe you only have a couple customers.
But that's the only way you're gonna get to more customers is by building on those first couple. Do you know what I mean? Like you need to, like you can't get to 10 without starting at one and two and three. And so it's the mindset part, right? Like, wow, I got a sale. I got another sale. I got another sale. And celebrating instead of saying, my God, I've only got four sales.
Jeni (12:12)
Yeah, well, and I would say it just goes back to that sort of old adage that is the more willing you are to sort of sit in the discomfort of something, the more likely you are to find success or the farther you'll be able to go in your success. you know, being willing to sit in the fact that you only have five sales in a month or 50 sales in a month. I don't know where you are in your business. Your success metrics change, of course, over time. But being willing to sit in the fact and acknowledge the very, as you said, neutral fact.
that I have 50 sales this month when my goal was maybe 300. To be able to sit in that and feel it and understand it and then just make a rational decision about moving forward. The more you can do that, the more success you're going to have.
Sandy (12:54)
there's a duality to business, right? Like there's good and there's bad. And sometimes, you know, we have to embrace both sides. And so sometimes it is frustrating and sometimes you don't meet your goals and sometimes you want to just bang your head against the wall. That's part of it. That's part of it.
Jeni (13:12)
So often when you're a new business owner, your goals are not grounded in reality. They're not grounded in data or realistic expectations. And so you may say, I want to have X number of sales in my launch, but you pulled that number out of nowhere, right? Like that was a goal that you made up in your imagination. And the fact is that until you have months or even years of data and running a business,
You can't really predict how a launch is going to go. Like if you've run Facebook ads for three launches in the past and you know what your budget is for Facebook ads, like you can have a pretty good sense of what your launch goals should be, what the range of possibilities can look like, for example. But if you're just on your first month in business or your first six months in business and you're like, I have a goal for 23 people in my launch. Great. That's great. It's good to have a goal, but you literally made that up.
and it's not grounded in reality. And business is really about math, basic math. And until you have the data to be able to make those kinds of predictions accurately, like you have to acknowledge that that's just a whimsical goal that you've set for yourself, which still serves a purpose because it's motivating you and it's, you know, it's helping you to have some sort of framework, but it really isn't rooted in reality unless you're backing it against data of previous launches for your business.
Sandy (14:33)
We're going to talk in a couple episodes about what to track and how to track it and using it to predict historically, not historically, like bookkeeping means looking backwards, right? Like you are looking at past events, you're looking at the revenue you received last month, you're looking at the expenses that went out, and we're going to show you what we do to take our numbers and project forward.
but it only works, it doesn't work in the first week or month of business. It's sort of after a year of having some data that you're able to kind of use those numbers, manipulate those numbers and be able to start to predict what's happening and also to know what you can afford. So I think bookkeeping is really, you know, sort of seen as boring and tedious and it's always looking like you're always in a lag, right? You're always looking at the past.
And so I think we want to talk about bookkeeping and how we do it and some of our tools. And then we're going to talk about how we sort of jump forward with our numbers.
Jeni (15:32)
Yeah, I want to just because not everyone has had a business before and I want you said something really key there Sandy Which is that until you have a year of data and there's a reason why a year matters and if you've ever had a business before whether it's a brick-and-mortar or Consulting business or anything, you know that when you're making projections and looking at your growth
You're not comparing this month to last month. You're comparing this November to last November because almost every business is seasonal and cyclical and you're going to have a rhythm in a company or in an industry. And so you really need to make your comparisons based on the month of the previous years. so until you have enough data, as you said, Sandy, at least a year's worth, those comparisons are relatively meaningless.
Sandy (16:16)
like in that first year, I can see that you'd want to look like you want to see growth like month over month, right? Like January to February, as cause you're growing and it's all new. But after that year, then I would switch to comparing January to January, February to February for that exact reason. Yeah. Okay. So I want to talk about a few things, some basic business set up so that as you start this business and you get going, you are set up to understand
what you need and then I want to sort of lay out what we're going to do in the next couple episodes. So first of all, I think everybody, and I'm going to speak for Canada and then you're going to just say a sentence for the U S that you need to separate your personal finances from your business. And that means in Canada that you are going to get a business number and you are going to create a holding company. So it's a separate corporation that all your money will go through so that you have a layer sort of one step removed from your
personal finances, your house, your cash on hand, business. So that if anything were to happen, if someone were to sue you, they would be suing the corporation and you would not lose your house.
Jeni (17:23)
Mm-hmm. Yeah, and we have the same thing in the United States. And the basic structure is an LLC. And that's what gives you that layer of legal protection. Again, this is not legal advice that you're hearing on this episode. We are not your attorneys. And we're not qualified or able to give you any specific legal advice whatsoever. But in the United States, the simplest way to create this distinction with a business is to form an LLC in the state that you live in. Then you're going to get an IRS ID.
F I E N from the IRS. And then you're also going to have a separate bank account that you open that's a business bank account. And you're going to want to make sure that you keep all of your transactions between your personal banking and your business banking separately, because in the United States, it's known as piercing the veil. So even if you create a business entity, an LLC or a corporation, a C corporation or an S corporation, once you start to commingle funds between a business and a personal account,
it's seen as piercing the veil of the protection of that corporation. And so if something were to happen and your business were liable, it's possible that creditors or investors can come after you personally if you have a history of commingling those funds. So again, we're not your attorneys. That's some very basic information. But for those of you who are risk averse, we always would recommend that you set up a business from day one.
Sandy (18:48)
Yeah, just do it. Just take the plunge. I know in Canada, I think it's like, you know, it might cost you $300, $400 to set up a holding company and then just keep everything separate so that as we go through this series, you'll hear us talking about tracking and you can't mix it with your personal. You just can't. It is so messy. Just keep a separate business account, have that different, you know, business entity for your business. Even if you do $500 a month, just take that. We're not talking, I mean, to most of you,
We're encouraging you long-term here. We're not saying you're gonna do a flash in the pan, you know, two month business and then end it. We're talking about P2Women who wanna build businesses over the next 10 years. Like we're talking long-term. So just go get your separate bank account and go create your separate legal entity.
Jeni (19:36)
That's right. And for the United States listeners, the LLC cost of incorporating an LLC varies state to state. It's actually quite radically different in different states. States like New York are very expensive, for example. You also have the option of incorporating in a state that you don't live in, for ease, sort of ease of your own life for most of you who are not planning to build a billion dollar company that
Tax advantages of sort of researching where to incorporate probably aren't worth it for you. I would just recommend incorporating where you live. Make things easy on yourself.
Sandy (20:13)
Okay, and then I just want to note that once you have this entity and this bank account, your next job is going to record every transaction that happens in that business. And we're going to talk more in a few episodes from now about what system to use. Like how do you actually track everything? There's lots of different software programs. We use Bench. We love it. And we're going to talk in detail about that. But basically you either need to use some kind of software
or you need to manually track everything that comes into your business and comes out of your business. And then as far as what to track, obviously you to do revenue and expenses, but we're gonna do a whole episode on what we track, like the exact things that we track and how we do it upcoming, but you are gonna have to make decisions because things are gonna come into your bank account and flow out and you're gonna have to like record what that is. And certainly for expenses, you're gonna have to say that this is a travel expense, this is a cost of goods and this is,
you know, software that I use to run my business. And we're going to go through that, but those are the kinds of things you're going to need to do. Okay. The other thing I think I thought a lot about this point, Jenny, and I think we're just going to say, go find an accountant. I didn't have an accountant in the beginning and I think there's no harm to spend a couple. Like I think my taxes are to get my taxes done every year. I spend, you know, a couple hundred bucks to get an accountant to do it. And it's just so worth it. And what the accountant is going to do,
is be your partner in your business. They're going to be able to, of course, prepare your taxes. They're going to help you plan for taxes. this becomes obviously more relevant the more sales that you have and the more sort of complicated expenses you have. But what I think is super crucial is that you have someone to go and ask your questions to. yeah. just like this, I think there's a part of us and that we asked for some input on Instagram, like, what are your problems? How do you feel about bookkeeping?
And everyone said, I feel so dumb. Like I don't know what to ask. And I just decided that my accountant is my partner and this is my business. His business is accounting. He is my, it is his job to make sure I understand what's happening. So all those questions, those dumb questions, it is his job to explain them to me. And the last couple of times, like in the early days, I would like go meet with my accountant.
and I'd walk out of there with my eyes kind of glazed, like, I don't know what he just said. I don't know what he said. And I was too afraid or too embarrassed to ask, like, wait a second, explain that to me. And so now I actually go in and I turn my voice notes on my iPhone and I record the conversation because sometimes I'm like, what was that that he, how did he explain that? And then I will also always, always, always take notes in my accountant meetings. And I put that in my folders
tax folder. have my written notes of what he was saying, what we could potentially do, like suggestions for next year or whatever. I record it and I just stick it in that folder. So I always have it. So I just really want to encourage people to find a great accountant that you're comfortable with and just know that their job is to answer your dumb questions. Like ask them, make sure you understand. But that's how people phrase it. Like they feel like they're supposed to know. And how are you supposed to know? How are you supposed to know?
They spend years training.
Jeni (23:33)
Yeah, I would say I just like, sort of take the village idiot approach to everything in life. I'm a questioner according to Gretchen Rubin's rubric of personality types.
And I have always had a million and one questions with our accountant. And I just ask them things that maybe should be obvious. I I never assumed that I should know anything. And I ask lots of questions until I understand it. And this is about, again, taking responsibility and ownership for your life and your business. And the truth is that you need to know what's going on. And you need to know how to set up your finances and how to structure your.
programs and whatever you need to know in order to make the most money from your company that you can make. And so ask all of the questions. And there's no harm. And I think, to be honest, the accountants I've talked to, and we have a phenomenal accountant for our company, they really geek out on explaining stuff. You're interested in their work. And so it's not a burden to ask your questions, because this person is excited that you're curious about their expertise.
So also it's a gift to be involved and to be like questioning what's going on. It's a gift to them to have that kind of relationship because I think so often in accounting, like people just dump a file, here's my taxes. Like please prepare my taxes and that's it. And so if you have questions, like it's actually probably really nice for those people.
Sandy (25:01)
Yeah. And I think they want to partner. I am actually since our women and money series, I have decided that for 2020 each quarter, I'm actually going to make an appointment with my accountant and I'm going to have him sit down and just make sure we're on track. What could I be doing better? Like I just want his eyes on my business and he gets excited about that. Like that's a great job. Like they like would love to help with planning and taxes and
dividends and all that stuff, right? And in the States, I think you call them distributions. He's going to help me. And I'm super excited to, I really feel like I, for the first time in a long time, like I own this, I own this. I'm going to figure it out and I'm going to do what's best for me. And it feels amazing. Okay, Jenny, that's the end of episode one. We've got some really cool stuff coming in the next couple episodes, as far as like accounting reports, P and L. We're going to talk about tracking. As I said, we're going to share how we track.
We're gonna expose it, we're gonna show you our methods as far as what tools we use. But for now, let's go into Joy and Hustle Youth to Joy.
Jeni (26:05)
do. So I have this kind of side hobby of following financial bloggers and sort of the people that go to FinCon. It's like this subculture in the online business space that I am not at all a participant in even remotely, but I'm fascinated by these people. And we're going to talk more about sort of financial independence throughout this series.
But there is a book that I read, a memoir this year called Meet the Frugal Woods, Achieving Financial Independence Through Simple Living. We'll, of course, link to it in the show notes. It's just a really simple, lovely read about this young family that was able to be really smart with their money and retire to a farm in Vermont in their early 30s when they had a little baby. And now they have a second child. They have a great blog. And I think that there is this entire subculture of people who are
making decisions early on in their careers and in their businesses to plan for the future and to focus on financial independence. And some people do it by saving a lot of money and other people do it by just making a lot of money, a lot of extra money more than they need so that they're able to kind of step away from the traditional job life where you have a job and you live for the weekend and the evenings. so
I love this stuff, and I have lots of books that I read about this in blogs, but this was one of my favorites. And I think it's just because I really related to this couple since I, of course, started a company and moved my family to a remote island. You can imagine there are some similarities there. So again, it's called Meet the Frugal Woods. It's a great read. It's a fast read. And if this is something that you're inspired by, this idea of financial independence as a business owner and as an entrepreneur, I highly recommend it.
Sandy (27:47)
is such a funny name. It makes me think of Fraggle Rock like the Muppets.
Jeni (27:51)
It is a funny name. It's a super funny name. And I didn't read the book for a long time, even though I'd seen it floating around because actually I thought it was bizarre as a name too. But there's a whole story about why they named their blog that and their book that. So I'll leave that up to all of you to read about.
Sandy (28:07)
Okay, so the hustle today is the Stripe app. So I love this thing. So we have a lot of our teachers on Namastream who wanna be notified when you a new sale or a new customer signing up, which of course you should. This is part of knowing your numbers. This is part of celebrating each sale. This is part of like witnessing the business in real time. And so we, as a payment processor, we love Stripe. The security is excellent. There's lots of like as a company, they're fantastic to work with.
Love Love Love Stripe, they have an app and you can put it on your phone and then you can easily see what is happening. And I have my fancy Apple watch and I can notify it on my watch. It's a little vibrate when we get a new sale. And so I feel like I am really, really aware of the numbers every single day because of this Stripe app. So you can set the notifications, of course. So I get a flash across my screen when something comes in and I just like knowing in real time what the sales are doing.
Jeni (29:06)
Sandy, why are you laughing at I don't do this, but I just had this brilliant idea for another app, another software company that would somehow integrate with the Stripe app. And instead of just dinging you, you have a sale. It would actually send a different GIF of people dancing across your screen every time you had a sale. Is that it feels I know, but I can just see how. Or I could make one just for you that's dancing hamsters, which would be the best thing ever.
Sandy (29:26)
That's what it
Nope.
Jeni (29:34)
Nope, Sandy does not like gifts of small animals just for the record. This is why at any moment I will hopefully be able to find a gift of a hamster because just I like to poke Sandy by sending her gifts of small animals. But yeah, I mean, I think for those of you who really want to have a reminder.
Sandy (29:38)
my god.
Jeni (29:56)
to practice gratitude in your business. I think it's a really smart idea to get the Stripe app, as Sandy said, so that you get notified. You don't have to go and think to check, did I make sales today, or go look at something. You can just have this hourly dinging on your phone or your watch or whatever it is you wear that's like, you have a sale. You have a sale. And I think for those of you that are building passive revenue businesses, it's just a really beautiful way to live.
Sandy (30:20)
think that's part of it. When I first was looking into building software and this whole idea of passive revenue, I remember hearing somebody say that it was on his phone and he would be like playing with his kids or whatever. And he had like a specific notification sound whenever money came into the bank account or Stripe or whatever it was at the time. And they would just like listen to it and they would just sort of be like, yay, we got some money. And I thought, oh my God, that would be so incredible to be like living your life and money coming in.
And that was like my dream and now it's happening. And so I think that's part of it. Like I love when my, know the stripe vibration on my wrist. I'm like, that's money. And it's just joy. can be distracting. So you have to be careful, but it's just like, I love it. I love it when it just comes in and you didn't actually do anything at that moment to get that money.
Jeni (31:05)
That's the beauty of passive income. Absolutely. OK, folks, we'll see you next
Sandy (31:08)
Yes.