Ways to increase revenue for your small business for Education

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[Music] welcome to episode 19 of the Graham Cochran show where I'm here to help you build your online business work less and live and give more I'm your host Graham Cochran honored to spend some time with you today we're gonna talk about money today few weeks back I was talking about money and a couple of different topics and I kind of asked you hey do you want to hear more about managing the money in your business talked about investments a little bit and I asked you to reach out to me and many of you did emails Instagram dm's all saying yes please cover the topic of money management can we talk about it a little bit and I'm gonna be honest with you I love this stuff I dork out over this stuff but I just didn't want to just talk about it if you didn't care but you reached out and said you care you want to know more about it so what we're gonna do is at least for now go do this in two parts in today's episode we're gonna talk about a lot of the fundamentals of cash flow and setting your business up financially to be healthy this is so important because if you don't get this right none of the fun stuff matters and then next week we're gonna dive into investments in retirement and things like that a little bit more in depth more glamorous stuff if you can call any of that glamorous but this is an important important topic to talk about because in the last few episodes we've been talking about growth growth growth growth reaching six figures and I exist I'm here to help you grow but there's a problem with growth and I don't know if you've ever thought about that that growth in lots of money and lots of revenue can be a problem in your business I'm you might be saying well Graham that's a problem I would like to have and you might be right because I think there's a scarcity problem where you don't have enough resources are scarce and then there's an abundance problem you've got too much and it's just a different set of challenges and if you think that is an arrogant statement then you haven't reached that financial level and dealt with that as a real problem this is a safe place we can have an honest conversation I know it's one-sided but if you're resonating with any of this if you have had financial success or had a windfall in your business or had a successful launch and it's more money than you've ever seen in your life or more money than you've seen in a 24-hour five-day seven-day period whatever it is you're gonna realize after you have some fun with the money that this is a new set of challenges because that money that you were so excited about having can go like that I mean how many businesses how many stories do we know where there was success there was financial success the numbers were great revenue was great maybe even the profit margins were great but then the business closes its doors a few years later goes bankrupt on a personal level how many human beings celebrities athletes people with multi-million dollar contracts and making hundreds of millions of dollars over a career go bankrupt or a millions of dollars how does this happen it shows that there is another set of skills that we need to have if if your goal is to grow a successful business and I hope it is okay we just talked about why grow a business beyond what you financially need well because you can give a lot of the money away because you can impact more people with your products and services there's so much reason to be ambitious in a healthy way and want to grow your business but you have to be prepared for what to do with that money and it doesn't start only when you reach six figures or seven figures or whatever your goal is it starts now you need to learn how to manage your money now this is a skill that most human beings on planet earth don't have business owner or non business owner alike this plagues people like crazy so it's important for all people to understand how to manage money but it's even of more importance for all of us small business owners to know how to manage money and so I'm gonna break some things down for you we can't go I mean I could talk for hours about this stuff and maybe we just need to maybe we need to do a 20 million part series of this stuff but we're not we're gonna keep it to the point I'm gonna be as efficient as possible respect your time and like I said it the very least we're gonna break it up into two parts so let's talk about you having a healthy business financially I'm gonna give you some practical principles let's start with banks and bank accounts let's start there and then we'll talk about cash flow what to do with it and sort of you're setting up your base camps that your base and your business is healthy and primed for growth okay it starts with in my opinion bank accounts you you don't have to necessarily have a bank account or the right things set up to go make money you could literally get a client or create a product and sell it online and collect money through your CRM or PayPal or something and you can you can make money but do you have a system and a cash flow plan in place for what to do with that money a lot of entrepreneurs make the mistake of blending account so this is like classic mistake 101 meaning you start a business maybe you create a product and you sell it online and that money gets deposited into your personal checking account though you do you pay your rent or a mortgage out of or you buy groceries out of huge mistake for a couple of reasons one this is not clean it's just not clean commingling business money and personal money is not clean as you'll see in a minute because even though you might be a solopreneur and you are the business and you're also the benefactor of the business's revenue we'll talk about the different hats in a second you have to be a big boy or a big girl and treat your business like its own entity otherwise you're gonna spend all your profit you're not going to have any framework in place to have healthy growth you're going to trick yourself into thinking you can afford things you can't when you have a good month or two in business it's all gonna be messy gonna be messy too on a practical level if you ever get audited by the IRS or you ever just want to do some recon on your own the data is gonna be real fuzzy it's gonna be really hard to get concrete numbers on what your actual business expenses were and what your personal expenses were or even know how much your income actually was from just the business because it's all just gonna blend together so step number one is you need a separate business checking account business bank account now in your state or country you might need to form a separate entity to be able to go to a bank and open up a bank account here in the state of Florida at the very least I need to register as a business with the Florida they're a whole program called Sun biz would never have to register pay the annual fee to get a fictitious name or a DBA doing business as so I for the longest time did business I was a sole proprietor didn't have an LLC but I could do business as The Recording Revolution ing to the state of Florida and that gave me a piece of paper that I could go to my local bank where I do my normal banking and say hey I want to open up a business checking account and they're gonna say show me that you're registered as a business and so we can open this up very simple step you might need to do that or if you already have your LLC and you have a tax ID number for your business then that's great you take that to the bank and you say I want to open a business checking account and then here's how things are gonna flow for you you are gonna have one business credit card and business checking account that you used to pay all of your expenses for the business so if you pay for a tool like kajabi right for all handling all your courses and your website and your email marketing on stuff you're gonna pay for kajabi out of your business credit card okay if you have to pay for a web hosting if you if you have to pay to buy a mac or a computer for your business or a camera or a microphone your podcast or whatever it is you're gonna pay for that out of your business account and I recommend a business credit card that then your business checking account automatically pays the balance off every 30 days so you're not actually carrying a balance because that's stupid don't carry a credit card balance ever okay but you use it as a cash flow tool you pay things with the business credit card and the business checking account pays it off right and then the opposite happens as well all business money that you earn all gross revenue every sale every affiliate income any kind of royalties you get any wherever you get money I mean I get money coming in from all kinds of random places you don't take that money personally ever it all goes to your business account so very simple your business account is your new hub for all business income and outgo okay keep it really really clean that's gonna be your new hub your personal account should not see any business expenses nor should I see any of that business income so then you might be saying well Graham how do I get the money if my business if I set up the business account and I'm getting paid into it my courses are selling and I'm having kajabi dump that money through stripe into my business account and it all is good then when do I get the money personally because I get that I can then use that money to pay for business expenses or employees or contractors or hiring a web designer or a graphic designer or whatever now you have to set up a paycheck and this is where the nuances between being a business owner and working for somebody else are very important to highlight when you are a small business even if it's just you you fulfill two roles okay you are both employer and employee you're both business owner and you're number one aka only employee potentially and so you need to split yourself into these two roles in your mind and make some decisions and then try to keep things separate so employer you business owner you is hiring employee you to do the work in the business and you as the business owner want to pay your employee a fair wage as the employee of your business you shouldn't have access to all the money in the business account all the profit all the time you shouldn't be able to dip your hands into the business account as the employee and hey we had a really good month we did a ten thousand dollar month this month with a big launch I'm gonna grab three thousand of that and uh go buy a motorcycle I don't know or go take a trip to the Bahamas it can't be that simple that gets really messy because I wouldn't let any employee of mine just dip their hands into my business account and take any of the profits as an employee I would at first set up a fair wage a regular paycheck and this is important for you on a personal level because one of the questions I get is well Graham how do you how do you pay yourself a salad as a family like I don't know how much I'm gonna make every month so I don't even know how much I can afford on rent or groceries or whatever it is and this is the dilemma if you have the separate business account now we have these the veil right in between the business and us we can then address this issue by paying ourselves a regular steady paycheck so you want to look at yourself if it's the business owner version of you look at the employee version of you and say how much can I afford to pay that person how much can I afford to pay that person every business that hires anybody asks this question they look at how much revenue is coming in how much expenses they have and they have to take on the risk of committing to a salary to their employees how can they promise to pay their employees the same amount month in and month out when they don't know how much money they're gonna make you ever thought about that if you've ever had a job where you've worked for somebody and it's salary or hourly and you get the same amount of hours they're committing they're saying yes I can afford to always pay you $50,000 a year how do they know that because that is as low as they can get away with and they know they make plenty more revenue in both good and bad months to cover that they don't just have a couple of good months and say hey I'm gonna pay you more this month because we had a good month then maybe you have some profit sharing deal but typically they're not gonna do that because they know that in a business you're months aren't all the same some months are good some months are bad some seasons are good some seasons are bad some years are good some years are bad so in the good years and the good seasons in the good months they let cash accumulate if they're smart in their business account so that when there's lean months there's still plenty to pay their employees the same amount they committed to that's the risk of being a business owner it's risky it's challenging so you have to keep that in mind as the business owner version of you when trying to help figure how much to pay the employee version of you if your business is on average bringing in $5,000 a month you wouldn't pay the employee version of you $4,000 a month $4,500 a month would you or would you the answer is you shouldn't because what if you don't make $5,000 a month in the next three months maybe you only make 3,000 and then four thousand and then 2,000 you have a low season now you can't pay yourself a salary now the employee version of you saying crap I can't afford my groceries this month or I can't afford rent you're freaking out because you have overinflated what your salary truly can be in a $5,000 a month business we know that a $5,000 month business doesn't always get $5,000 a month it just doesn't happen that evenly as much as we'd like to believe it does so if you made $5,000 a month on average you'd have to start by looking your expenses how much is that five thousands already taken spit our you know spent on expenses you got to pay taxes which we'll get into in a second and you gotta have some profit left over when we get to in a second so really the number goes down down down down down how much you actually can pay yourself and then there's the variable if we just don't know if you're gonna bring in five thousand every month we're gonna bank on the good months the ten thousand dollar months the eight thousand dollar months to help us out when we have the two or three thousand dollar months but even if you average five thousand you need to figure out what's the lowest amount you can get away with paying yourself so you can commit to that fixed amount every single months will be your salary and just a little heads up this will only be one of two main ways you receive income so don't freak out this is you're not gonna be making as much money as you thought but just be realistic your salary your consistent salary is probably gonna be lower than you thought and as your business gets more expenses and as it grows especially if you add team members it gets a little more complex and you're gonna have to stop looking at your total revenue as your total paycheck because it never was that any way but as a big big boy big girl business you're gonna have to start thinking about it as total revenue then all these different costs and your salary is just one of those costs okay you got the two accounts business checking account personal checking account money comes in the business account you start to look at what am i bringing in on average well in the last 12 months what did you make gross right what actually came in $40,000 in the last 12 months divided up by 12 subtract all your expenses subtract what you paid in taxes last year see what's left over and then you want to take 80% of that to be a lowball estimate of what your salary can be but you're gonna have to work that out yourself because you probably have personal needs but this tells you when your business can fully cover your bills but you work out your salary to yourself and then just make it automatic you know withdrawal from one account if you're just transferring money oh you own to another account you own so it's your money either way this is just a formality to keep things clean and a mental picture for you that you're going employer business owner version of you is paying the employee version of you this set consistent salary makes sense okay so you got to work out your salary and you got to get those separate accounts now if you're following what I'm teaching you every single week if you're following all these best practices and you're putting in the work and your business is starting to see traction you're starting to grow you have to think about what are you gonna do with the money that comes in beyond what you pay yourself in your salary because you really do need a gap and you want to figure out what that gap is and that gap is called your profit so you've got your gross income that's what's coming in every month that's the sales revenue the data the big number we all look at like oh I'm a I'm a six-figure business guy did a hundred thousand dollars last year okay yes you brought in 100k let's say but that's not what you get to live off of because you gotta pay for all your expenses that it took to generate that profit sure you needed a website I'm sure you needed some kind of product delivery tool you know and the good thing about online businesses is that they're so low cost they're so low cost okay I think the first video I did on my website was how to start your business for $50 or less that's how ridiculously low cost it is the barrier of entry financially to have the tools you need to be able to be present online deliver a product or service and collect a paycheck or collect sales revenue is so low it's crazy but there's some operating expenses obviously if you have employees this come under that if you have an accountant you pay the accountant things like that those are the ongoing expenses and then you got to keep in mind I have a buffer for the upcoming one-off expenses when you need a piece of equipment that you don't buy every month but you just buy it once you need a new computer you're gonna travel to some kind of trade show in your niche or a first speaking engagement or whatever would be right there's gonna be costs you need to have money in your account for those things so you want to think about what are your actual expenses here what comes in every month but then start to do subtract your expenses and then what's the left gross incomes everything comes in we take away your expenses what's left is the taxable portion again this is one of the benefits we talked about this on the cash flow quadrant episode this is one of the biggest benefits of being a business owner as you get to spend all your money pre-tax you get to pay for your camera your podcast microphone your web-hosting kajabi whatever education right you get to pay for that out of the business before taxes so you're not taxed on that money which means it reduces your overall taxes so if you make fifty thousand dollars a year but you spent ten thousand dollars that year on costs and expenses and some one-off things and some travel for business then you're only taxed on the remaining forty thousand which reduces your overall tax bill which is awesome but that's them out you're gonna be taxed on so that's an expense as well and what you need to do is figure out what tax bracket you're in okay you got to figure out what tax bracket you are in and I can't get into details about tax brackets because many of you aren't in America for one so it's the tax system is a little bit different in your country potentially and then even in the u.s. you've got federal income tax that we all have to pay but then depending on where you live you'll have state income tax now in Florida big shout-out to the state of Florida there is no state income tax so I don't pay income tax to the state of Florida just to the federal government but that will be a level of tax you pay and then how much money your household brings in will affect what your tax bracket is so whether you're sole proprietor or even an S corp LLC like I am and if you don't know what I'm talking about you can watch my LLC versus sole proprietor video but even both of those entities one that's got an LLC and is S corp and one that's just a little sole proprietor both are passed through entities where you pay taxes on your personal return so all that means is house allowed trained or all that means is is you pay taxes based off of what your whole household brings in so if your spouse works if you have other income that comes in from other sources and inheritance investments something else that will all affect your tax bracket it's not just your business so there's a lot of variety there but if you do some basic googling on tax brackets for small business owners tax brackets for your country tax bracket for your state and for small business owners you can figure out and here's what I try to do an overall percentage to base off of right so I like to find a percentage that I'm going to use to set aside my taxes every month again the percentage is only on your taxable income so if I made five thousand a month and I spent about a thousand a month to generate that five thousand a month I'm gonna take my tax percentage off of the four thousand and what I'm gonna do is set it aside in another business account this time a business savings account set it aside the moment the month is over so I don't have access to it anymore so that I can pay my quarterly taxes every quarter or depending on your revenue you might have to pay every month so that just depends on how much money you're making if you're not sure get an accountant and he or she will help you figure that out either way part of your money's going away in taxes every month which isn't expense so your actual operating expenses your actual taxes set those a size especially if you're a small sole proprietor just set it aside in a savings account let it accumulate so it's a percentage every month and then every three months whenever the quarterly taxes are due get that set up you can pay directly online something in the u.s. called EFTPS dot-gov stands for the electronic federal taxpayer system it's just a fancy way of setting up your bank account to be able to pay the IRS directly once a quarter very simple to do you should be doing this don't not pay your taxes that was awful grammar but please pay your taxes one of the dumbest things you could do is to forget to calculate your taxes every month and to just say well I'll pay them at the end of the year eh you'll incur a fine if you're in your second your business or later because you're supposed to be paying quarterly they want their money as you go to some degree remember when you have a paycheck it's already taken out but if you are in self-employed no one's taking anything out of your paycheck so it's your responsibility to set up your account with the IRS with EFTPS gov and pay them your quarterly taxes and then when you do your taxes at the end of the year you know the numbers are gonna figure it all out and figure out you don't know if you're exactly on par but if you know your tax bracket and your you just do some basic math you could be in the ballpark of what your taxes are and if if you overpaid a little bit then it's just like with your paycheck at an old job though they'll send you a refund and if you underpaid a little bit that's not a big deal at all either a lot of times new entrepreneurs are really scared of underpaying well you definitely don't want to under pay on principle but it's hard to know if you're exactly long as you don't know what expenses are gonna happen you don't know actually what your revenues gonna be in the last quarter and maybe you underpaid or you don't know if the tax laws are gonna change like they did with the Trump tax law change in 2017 it affected my 2018 taxes I got more back so you don't know a lot of times but at least you're paying something in that should be in the ballpark so when you square it all up in the new year and you're doing your tax return if you owe something it's not all of it it's just oh I was under a little bit and to be honest that's pretty normal a lot of times you'll be just underbid okay so I a little bit not a problem if you're managing your business well see how unfun a lot of this is because you got to pay your expenses you gotta pay your taxes you haven't even paid yourself yet but then you pay yourself a salary then this is where we get into the extra if you are keeping your overhead low keeping your expenses as low as possible not buying crap you don't need for your business not paying for tools you don't need this is another I'm gonna plug kajabi again this is another reason why I have switched almost everything that I use online over to kajabi because it saves me money because I used to pay for webinar jam right to do webinars used to pay for leadpages to host all my landing pages used to pay for hosting my courses somewhere else and then eventually a kajabi and then used to pay for email marketing for other things where i could do a lot of the email marketing for free inside of kajabi it adds all of these things into one tool so anytime I can save money I saved money so I just have ridiculously lowered my expenses by cutting a lot of these other one-off things that I can not do all inside a kajabi and I'm gonna plug good job because I love those people and it's the tool I use and so what I teach all my students to use I'm pretty biased cuz it's my favorite but if you go to Graham Cochran comm slash kajabi kaj ABI you can get an extended free trial normally it's 14 days but my link you can get a 28 day free trial and you get access to their 28 day challenge videos which is like basically how do you make your first thousand bucks this month super-dope you can try it out and if you like it stick around and it's an affiliate link that helps my business if you don't like it or you just don't want to support me you can buy it outside of the link it doesn't matter either way you should get on the platform because it will save you money so you want to be thinking like that how can I save money I don't want to I don't like hiring a bunch of people just to feel important I don't like having a lot of tools I don't like rent right so I worked from home for the last nine years we just bought this place as an investment and I'll work in it from time to time and that's another story that we'll talk about in the next episode but I don't like to look big and important because that cost money I like to keep my expenses low so I keep more of my money when you keep your expenses low you figure out what your taxes should be there should be profit and actually I think one of the smarter things you could do is to commit to a certain amount of profit before you commit to expenses to protect yourself from eating up all of your profit this is something that Mike McCalla whit's calls profit first you're at a great book called profit first it's very practical if you want to think about how much money you should be setting aside as a business or how much profit you should have and Mike's a really funny guy a great writer I love all his books the pumpkin plan is great clockwork is another one that I'm working through is really great but profit first and this it's really really simple your goal minimum as a business and if you're an online business like I teach you to be it's a good numbers gonna be a lot higher eventually but your goal should be a minimum profit of 10% a month and if I were you I would set that aside and say I'm you know if I made 3,000 this month I'm gonna set aside 300 and put it in a savings account or whatever or at least mentally set aside 300 as my profit be--if before my expenses and so that means that if you let's say make $1,000 your expenses are 900 then a hundred is your profit but again do it the other way around if your sales are a thousand typically commit to a hundred dollars of profit which is ten percent which tells you the max you can spend on expenses is nine hundred right so just this is the same as paying yourself first in a retirement account if you have a 401 K or something and we'll talk about 401ks next week but it's taking your money that comes in and not just staying afloat which is the what a lot of us do do I have enough to pay my bills stay afloat you want to get ahead you every month that your business puts money in your account even if it's only a hundred bucks you want to get ahead a little bit so that every month of your business's life unless it's a completely awful season when yours not profitable and everything's falling apart which hey that's happened you want every month to be getting you this much further ahead even if it's slow these are baby step principles that you can apply now when the money's small so that when the cash comes in and it's huge wind falls it's the same principles just more zeros behind the and you don't even have to think twice about it so you want to set aside profit now one of the questions that comes up when I talk about this is that isn't my salary profit no your salary is an expense that the business pays which is pretty awesome so if you have employees salaries for them are expenses as well but is an expense and that's how I want you to view it as an expense you do pay taxes on it because it's a pass-through entity most of the time but that's not your profit that's just what you're getting paid to work so you can live your business should also have profit for the business to do well and for you to do certain number of things and there's some things that I want you to do with that profit few of them we're going to talk about next week but this is the big one that I want you to focus on and what we're gonna focus on today if you're following me so far and maybe you already have a lot of this in place then kudos to you separate bank accounts money comes in your business goes out your business for expenses you've committed to a low doable salary that's doable in good months and bad months you're paying yourself a salary you know and as again as the business does better over time if you see it's really averaging higher and higher you can re-evaluate and ask yourself for a raise that's totally normal you're setting aside money for your taxes so you're not getting in trouble with the IRS or the taxman but you're setting aside that 10% or more I mean I set aside as much profit as you possibly can there's a lot of things you can do with this profit there's four things that I think you can do with it and we're gonna talk about one of them today and the most important thing you could do from day one with your profit is build cash reserves okay too many businesses look like most Americans just live and paycheck to paycheck to May businesses are living next month sales to hand in foot to next month's sales they need the revenue this coming month to be what it was last month to be able to pay all their expenses whether it's their regular expenses to operate the business or employees or just their salary and they think if I'm making enough to pay all my expenses taxes and pay my salary I'm good you're not good you're not good why are you not good because not every month you make as much money as you need there are gonna be months where you're not gonna have as much as you need revenue is inconsistent we talked about this you've experienced this I have recurring revenue from a few sources which helped stabilize and I have a relatively stable business but even then revenue is always inconsistent I don't have the same amount of money from one month to the next in the real world these sales and these clients just don't come nice and steady they ebb they flow so you need to prepare for that so you've got inconsistent revenue and yet over here you've got fixed expenses you always have to pay your webhost you always have to pay for kajabi or whatever it is you always have to pay for whatever your monthly expenses your accountant your employees your graphic designer who's on retainer whatever it is you typically have fixed expenses so you've got inconsistent revenue over a year fixed expenses over here recipe for disaster unless you have something to stabilize the inconsistent revenue because you can't just change your expenses every month when you're below a month low expenses it doesn't work that way so what you need and what I need is cash we need cash to endure it's the only way to do it the only way to keep your doors virtual or real open for years and years and years is to have access to cash when you need it and you want to be open for years and years and years not just because it's a lot of fun but it takes sometimes years and years and years to see the success you want so to give yourself a chance reach the level of success you want you got to stay open you can't stay open for business when you don't have cash so your first step with your business profit is to build cash reserves I want you to create your own line of credit if you're familiar with the line of credit this is a loan agreement with a bank where they do the research and they qualify you and say yeah we feel like your business is is trustworthy enough we like the numbers that were willing to set it up where it's basically like a credit card you have access to a line of you need a lot of cash you need to buy something we have a really low season you have access to our money we'll give you our money so you can keep paying your bills and get to the dips but then of course you have to pay it back and you have to pay it back with interest so instead of borrowing money in your slow month slow seasons when times get tough when you have unexpected quarter where there's just no money for no reason which happened to member the first quarter of 2016 my revenue is down 30% for the first time ever if for no reason then I could see it came out of the blue when times are tough you create your own line of credit in the form of a business emergency fund this is so simple this is a separate business savings account ideally it's three to six months of your business expenses not your personal expenses okay not your salary but the costs it takes to run your business so you could job' your web-hosting if you don't use kajabi which you could because you can build a website for free your employees whatever your monthly costs are your accountant whatever those costs are times them by three minimum ideally by six so if it takes you about five hundred bucks a month to run your business times that by six you need $3,000 minimum in a separate business savings account so you may not get there right away it might take you a few months to set aside $3,000 a might take you a year or two but whatever it takes set aside those three to six months of business expenses and put them in that separate savings account that way when you have a low month and you need cash to keep paying for these tools you can pay for them out of that virtual line of credit out of your business savings account and you're fine and then when you've got better months you fill it back up it's a one-time thing it's not an ongoing thing I mean you don't need to keep it expanding forever and ever there's other better things you can do with that money but I want you to get to six months ideally of business expenses in a business savings account as your business emergency fund that way you are in a better position when storms come and this might make you think about well what about my salary that I pay myself if I have a low month that's hard to pay for the business expenses it's probably gonna be hard to pay for my salary yes so then personal finance one on one you need to have an emergency fund for your personal expenses that has nothing to do with being a business owner that has everything to do to being a human all humans need cash reserves okay it's the same thing but from a personal level so I would encourage you to talk to your spouse talk to your family look at your budget look at how much it costs for you to live not live the lifestyle you love when everything's thriving but what are the bare minimum expenses rent or mortgage electricity food on the table gas in your car or right to get to your office or get to work whatever it is basic insurance premiums right so you're safe life insurance health insurance things like that what are the bare minimum expenses like you're not gonna include eating out you're not gonna include Netflix no just add up the bare minimum expenses that it takes to survive and live without having to sell your house in a week which is virtually impossible times that by three to six and work on getting that set aside and your own personal emergency fund separate from the business you do business with yourself over there no pun intended to just make that happen because that's how you protect yourself and keep paying yourself what you need to keep your life in order business needs a line of credit and cash your life needs a line of credit and cash want to be borrowing money when crap hits the fan this is like the worst time to borrow money right you want to be able to have anticipated crap hitting the fan by being wise and setting aside some cash reserves so in review once you start to figure out what your profit margin is consistently funnel it into a separate business savings account aim for three to six months of your business expenses real simple once you have that there's a lot of peace of mind that you have I have a lot of peace of mind knowing I've got a big wad of cash at my business savings account and you know what there have been a couple seasons where I needed it I'm really glad it was there and then when you have a really good season you know when a really good harvest comes in you set some more aside you fill it back up because you know business is cyclical life is unpredictable it's not a steady climb up its ups and downs and so you prepare for it to rain it's a rainy day fund your grandma's rainy day fund you know it's gonna rain one day so get an umbrella okay don't just be surprised when it rains if one of these water droplets coming from the sky no get a freaking umbrella okay prepare in advance this will give you peace it'll stabilize things functionally and allow you to just operate because at the end of the day no one what nope this is why no one wants to talk about money and maybe you're just like nobody wants to talk about it you know why because it's not what they geek out over unless you're weird like me what people want to talk about and geek out over is their work is their passion is their art is their craft is the people that they're impacting so you're a business owner maybe a hopeful business owner you have something you desperately want to bring to the world do you know you were made for a god designed you to do and you're good at it your might be scared out of your mind and insecure welcome to the club but you still feel like this is something I need to do and you you envision your future being able to help people do what you help them do and make a good living and have the flexibility and freedom that that's what you want to think about you don't want to be thinking about taxes and bank accounts and emergency savings and I get it I get it but we have to grow up we have to grow up and understand that mature people understand that in order to focus on the creative fun things we need to build a solid foundation that will allow us to be freed up to focus on the creative fun things if you take the time to build out healthy business and bank account cash flow strategy cash reserves all that stuff get that in place you don't really have to think about it much ever again I don't think about my business accounts it's just a place where money goes in money comes out I don't think about my salary pay myself the same salary every month I don't think about when craps gonna hit the fan because I've got a wad of cash sitting in my reserves account it's done like I did the work once now now I can focus on coming in here and recording a podcast for you I can focus on building new products I can focus on watching a cool YouTube video that inspires me you see what I'm saying because you don't want to talk about money or deal with this stuff it's so critical that you do do it at least once check in with it regularly but set yourself up so that you don't come to a screeching halt when you have a bad month or a bad core or a bad year Apple Computer is one of those businesses that excuse me they're not even Apple Computer anymore from Seoul old school Apple ever since Steve's dog Jobs died you know they've been on a slow death of innovation right love the company buy all their stuff some cool products still have come out but you have to admit it's not the same level of innovation as it was when Steve was around a lot of turnover a lot of change it's a it's a that's a big loss to lose the visionary and they've done as good of a job as they can maybe maybe not I don't know I don't know them personally I don't know what they're talking about but the point is Apple hasn't been the darling that it once was there was a season where it could do no wrong and there have been seasons where their quarterly projections are they have to lower them there