Are you a profitable company? Are you sure???? It’s Thursday, and like most Thursday’s Dan has company finances on his mind and that is what we are talking about today. Make sure you have the complete picture of what is going with your business. Check out the website for more content www.bcbousa.com
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Hello and welcome to BCBO Daily. It is Thursday May 13th, and I am your host Dan Murch. I am back for my favorite day of the work week. It is Thursday. As you guys know, I love Thursdays. It is a very busy day. I get to spend a lot of time going over big picture things, going over finances, scheduling, all sorts of good stuff that I get really excited about.
First, let’s talk about yesterday. Wednesday was a good productive day. As I talked about yesterday morning, I started with a brand new, fresh attitude and I let that carry me through the day. Of course some things didn’t go as I planned, there were a couple of hiccups, some things that came up that I wasn’t expecting to have to deal with, but I did. In the end, it all worked and I got a lot of work done. Completed all the tasks that I needed accomplished, and overall a very rewarding day even though it was cold and rainy and gloomy outside. I didn’t let that bring me down.
I am in a better mood when the sun is shining. I don’t know how many people get affected by that, but when it is nice out and the sun is shining I have more energy and I am generally happier. When it’s a cold, dark, gloomy day I feel it. I physically feel it. I don’t know if that is normal for everyone or if it’s just me, but regardless yesterday I was able to fight through it and get a lot of stuff done so that was really good.
We are ready to jump into Thursday. As we talk about every week, whether you do it on a Thursday or Friday, I don’t care what day you do it, but make sure you have a day where you are sitting down and going over your finances because it is really important. With that being said one of the things I wanted to talk about today is something that has come up with multiple clients over the past.
You have to get the whole picture. When you log into Quickbooks Online right on the main page there are all these little snap shots of the company. You can see your expenses, invoices due, profit and loss, etc. You can do it for a month, quarter, year, etc. There are lots of different options there. If you just look at that and say “Ok, cool. It says I am profitable. I’m making money” and that is all the research you do you are not doing yourself or the company justice. You are not getting the whole picture. It is called a snapshot for a reason. It doesn’t tell the whole story. It only tells you part of the story.
One of the things that comes when I talk to people, especially if they run an LLC, is how owners pay themselves. If you are taking an owner’s draw that shows up on your balance sheet, not necessarily your profit and loss. So someone can take a look at their P&L and say “Oh, well it says I made $200k in profit last year, but my bank accounts don’t reflect that. Why not?” Well there are items on your balance sheet that play a role in your bank accounts obviously that don’t show up on a P&L. When you things like vehicles or certain pieces of equipment, those are assets that hit your balance sheet, they don’t hit your P&L. I don’t want to get too crazy, technical with the accounting that goes into it, but that’s why you need to look at everything that is involved with your company’s finances.
Make sure as the owner of the company you are taking a justifiable amount of money back out of the company. When you are calculating things like overhead make sure you are taking your salary and what you take out of the company into consideration. Otherwise you are not coming up with a clear, accurate snapshot of the business. If you are taking money out of the company, but not including it in your overhead calculations then you are not building that into your estimates. You are not covering yourself in the business. Call it a salary, draw, whatever label you want to give it, but it needs to be built into your pricing.
Again, just want to stress again how important it is to be over your company finances. I recommend you do it once a week. Make sure you have a really firm understanding of what is going on. When it comes to things like cash flow, like budgeting and planning for the future; if you only know part of the story, you cannot create an accurate prediction going forward. It is not possible. You cannot do an accurate cash flow forecast for the next week, 6 weeks, 6 months if you don’t have a firm understanding of how much money you actually have, and how much money you will actually be spending.
That is what I wanted to hammer home today. Why it is so important that we do this every week as a company, and why it is so important that you should be doing this every week as a company. As always, this is stuff I love talking about. So if you have any questions or would like to discuss anything please feel free to reach out via Facebook, email, call, go through the website, whatever. I really do love talking about it.
That’s really it for today, kind of short and sweet. I have a busy day ahead of me. I am looking forward to getting into the office and diving into all those things we just talked about. I hope that everyone is feeling productive as they are going through their week. I know from talking to all of our clients on the Blue Collar side and our contacts on the construction side of things that everyone is super busy right now. There is a lot going on and a lot of things on everybody’s mind, lots of things getting people scared like the gas shortages and things like that. Hopefully your week has been smooth and you are feeling pretty good about where you are, making good decisions, making good progress, and taking good steps forward towards your goals and your vision.
So let’s do it people. Let’s jump into today with both feet. Let’s pay the rent on our success. Let’s keep grinding away this week, keep getting things done. Let’s keep asking ourselves that question – How would the person I want to be handle the thing I am about to do. Let’s keep pulling ourselves forward, let’s keep putting ourselves in that forward thinking mindset. Like I said at the top of the podcast, and like we discussed yesterday, things are always going to go as planned. There are going to be problems today, issues you didn’t expect to deal with, some stress, some things you just weren’t ready for. But it’s going to be ok. So just take a deep breath, go to your happy place. Just like in the movie Happy Gilmore, find your happy place and remember you are going to figure it out and it is going to be ok. Let’s try to limit the negative self-talk. Let’s be easy on ourselves and not beat ourselves up.
At the end of the day let’s review everything that we did, make adjustments where needed, but make sure we are finding and celebrating our successes. We are working hard. We are good people. We deserve good things. We deserve to be happy. Let’s remember that and be good to ourselves.
Lastly, as always, go check out the website bcbousa.com. That is where you can get all the good good. Let’s go have a great Thursday. We will be back tomorrow to wrap up the week. It has been a great week. I am looking forward to today, looking forward to tomorrow. I have some good stuff going on. Hope everyone feels the same way. Go out and have a great day and we’ll talk tomorrow. Thank you for your time. Bye.