For most eCommerce and Online Business owners, this time of year means a slow-down to the pace of business. These beautiful summer days are perfect for washing away the memory of all the stress involved in getting our finances sorted out for tax season.
While I love the lazy pace of summer as much as the next person, I also have to bring in a little bit of caution to eCommerce and Online Business owners.
Unless you want to repeat that hectic, stressful crunch time all over again, it’s important to make Money Meetings a priority.
In fact, summer is the perfect time to make Money Meetings a regular part of your business’ monthly life cycle. They will become your not-so-secret secret superpower!
What Is a Money Meeting, Again?
A Money Meeting is a specific time you set aside on your calendar to focus on your business finances and in particular executing a plan to tell your money what to do (otherwise your money tells you what to do).
Practically speaking, Money Meetings are designed for gaining financial visibility, financial accuracy, and financial planning. I believe the bare minimum timeline of a Money Meeting should be 90 minutes, once a month. However, once-a-month meetings end up being much longer, and not as strategic.
Think about it the way you would a coffee date with a close friend. If you only see them once a month, what happens when you sit down together?
You spend the first twenty minutes (or hour!) just catching up on everything that’s happened since you last saw each other! This is fine if it’s just a catch-up meeting.
But if you have something really important to talk about with them—say, you want to get their advice about something you’re dealing with—running out the clock on catching up leaves you with very little time to get to the nitty-gritty.
The same thing is true with Money Meetings. Unless you want the meeting to go on all day (and nobody wants that—not even me, and I’m a CPA!) you’re better off having shorter, more frequent Money Meetings throughout the month.
To me, the ideal frequency is having Money Meetings twice a month, spaced out around 15 days apart.
If you’re having cash flow issues and need to keep a closer eye on cash, bump it up to once a week.
I know it sounds like a lot, but try it and you’ll see how much easier these weekly meetings result in keeping your business on track.
What Makes a Money Meeting Successful?
It all comes down to one simple thing, and it’s probably not what you think.
Ready? Here it is:
Get the Money Meeting on your schedule.
I have seen it over and over—if you don't schedule a Money Meeting, it will never happen. As a result, even with the best intentions, you'll end spending money haphazardly.
We all know how easy it is for an eCommerce business to overspend on products and things you’re sure will help you sell them. (Especially if it’s the latest thing that all your friends are trying.)
Or, how easy it is for an Online Business to freely spend for online training, coaches, travel and contract labor.
If you aren't watching your finances closely, the result can be a snowball of debt and losses that are difficult to rebound from.
As I said before, if you don't tell your money what to do, it will tell you.
Trust me, that is no way to live! Money Meetings are crucial to focusing on a goal and planning how to make that goal happen.
What Do We Do in a Money Meeting?
1. Make sure your bookkeeping is caught up to date.
If your books are not updated, use part of this time to do this. If it takes the entire time (or more), make sure you do this first.
No real financial progress can be made if you don't have this visibility to your finances.
2. Balance your bank accounts.
This is the “accuracy” part. If your numbers aren't accurate, you are making decisions based on things that aren't real.
3. Look to see what your cash balances are and pay the bills you need to.
First things first: have a plan for bills you can't pay right away and write it down.
Make sure you communicate your intentions to your vendor; this is important cause they can't read your mind and many of them are willing to work with you as long as they believe they will get paid.
4. Don't forget to make plans to pay yourself and cover your taxes.
5. Look over your numbers paying particular attention to your profitability.
An income statement is ideal to analyze. Here is where you get the information for planning. But, your Balance Sheet is really where the true health of your business lies.
6. Don't beat yourself up if the numbers look bad.
This is simply where you start. There is hope in truth.
7. Make some short-term goals.
If you struggle here (which most of us do), invite a “Profit Partner” into the conversation and get some coaching and accountability around this.
Let’s Talk About Profit Partners
We all know what happens to meetings—they get missed, cut short, postponed. In other words, even when they’re on your schedule, it’s hard to make them happen.
This is where your Profit Partner makes sure you show up for your Money Meetings.
More than that, they keep you accountable to the strategies you’ve been setting and pursuing from one Money Meeting to the next. They look and listen to what you have done (or haven't done) since the last Money Meeting and they challenge you.
Without a Profit Partner, you are subject to your own limits and expectations, which will fall way short of your potential.
So how do you find a Profit Partner?
Bare minimum, your Profit Partner should be someone who is a step better than you are in the area of ecommerce business finances. That way they will teach and mentor you in areas that you lack or need encouragement in.
Accountability, mentoring and insight are the key to making progress through your Money Meetings.
What kind of progress, you ask?
Here are just a few stories I love sharing about the power of Money Meetings:
- Client 1 – Increased paying themselves (a husband and wife) from $79000 a year to $202000 by the 4th year and had money set aside and paid in for taxes
- Client 2 – Lowered COGS by 5% over 2 years which calculated out to be approximately $86,000 savings that could be paid to the owner.
- Client 3 – Was able to set aside money to pay taxes quarterly and didn't have the stress of a big tax bill at tax time and saved a lot of money on penalties and interest
- Client 4 – Paid off huge amounts of debt over 12 months which led to being able to purchase a home for their family
- Client 5 – Visibility with their finances gave this person confidence to quit their W2 job and work full-time for themselves. This allowed them to earn more and play more.
The Bottom Line
Money Meetings may be the single most important thing you can do for yourself. Money Meetings ensure your goals to “pay, play and profit” become reality.
And let's be honest: why are you even “in business” if not to get to these goals?”
Profit is a process™, and the process only works when you work it.
Everyone needs to recite this to themselves every time they meet with their money… even all of us here at The Bottom Line CPA….. every day! Pay, Play, and Profit makes the hard (fun!) work of running an eCommerce or Online Business totally worth it.