Is Your Financial House in Order? With John Briggs
Jess and Margy are the co owners of Interview Connections, the first and leading podcast booking agency. This is the podcast where you will learn all about podcast guesting and how to leverage podcast interviews to grow your brand awareness.
Today’s episode of Rock the Podcast talks about getting your financial house in order with founder of Incite Tax & Accounting and Profit First professional, John Briggs! John has learned that achieving a highly profitable business can be overwhelming, particularly with all the barriers and unknowns that new owners are forced to deal with.
Entrepreneurs can quickly become stressed and burnt out, and often sadly give up on the mission that they set out for. In much the same way that the body needs blood to survive, a business needs cash, the lifeblood of the business, to stay healthy and to grow more resilient.
John is a man on a mission to give entrepreneurs an actual work-life balance so they don’t get burned out. He helps them increase their cash immediately so they can have confidence in their choices and become financially resilient.
He talks the walk by battling against the traditional CPA culture of “overwork, underpaid, pay your dues and suffer while you’re at it” mentality by providing his team a healthy work life balance even during busy tax seasons.
John is a Profit First professional, and many entrepreneurs and business owners may have heard of the method without ever really implementing it. Jess read Profit First when she started Interview Connections in 2013, and shelved it for later because it can seem very overwhelming and scary to new business owners.
Margy’s one piece of advice to new entrepreneurs is: Trust Profit First.
Interview Connections hit 1 million in revenue in 2019, and more than doubled that in 2020. Even though the business was doing better than ever, Jess and Margy were taking home less and less every year. They were working harder than ever before, but could feel themselves inching closer and closer to full-on burnout.
Once Jess and Margy worked with John to implement Profit First, they realized that they could simply fix this problem with better cashflow management. John worked as an accountant for a door-to-door sales company.
This company John has worked for, made over 30 million dollars in revenue, but their commission checks for their sales people were still bouncing.
How did this happen? John did an analysis to figure out why this company was having huge sales, but wasn’t able to pay their salespeople. For every sale the company made, they kept about 1% (which was $8 in this case). As their revenue increased, their expenses increased alongside.
John told the company that they were spending too much, and the company replied that they would just sell more to make up for it. But John knew that this just fell into Parkinson’s Law: the demand for something will match its supply. The more money they made, the more money this company would spend. This would increase to a point where the company was no longer profitable.
If you have one bank account as a business and all your money gets deposited into it, and all your expenses get paid out of it, what you have sitting there is a gigantic pile of supply. The demand for it –the expenses, the cash outflow– is going to continue to increase to match the cash available to spend.
Spending will get out of control if you’re not putting any boundaries on what you’re doing with your cash. Profit First requires that you set up additional bank accounts for different cash obligations that you have, including money for the IRS, money for your team and employees, paying for yourself, and money for profit.
Margy always felt like budgets were restrictive, but with Budget First she feels like the money in Interview Connections is abundant and flowing.
With Profit First you’re setting aside money for your tax obligations a couple of times a month. Compare that to a scenario where as a business owner, you do your taxes and you owe thousands of dollars! You’ll ask, “Where am I going to find that money?” It was spent because the demand for that cash expanded to match the cash that you had.
Business owners, do not undervalue enjoying what you’re doing and having a little extra for yourself! You have to see the reward for your work so you are able to stay excited about it. There’s such an energetic block when you’re working more. You’re getting run down, you don’t see the expansion that you feel like you’ve been working for and earning.
For Jess and Margy, working with John has been transformational – not just about having more money, but the way they feel about their cashflow management.
Service-based business owners often feel fulfillment in the service that they are providing to their clients. However, these business owners need to feel fulfillment in other ways, such as in their income and freedom, otherwise they will become burnt out.
Profit doesn’t have to be about getting rich. You have to have profit to continue to be passionate about who you’re serving. You have to have profit to keep your doors open!
Service and sacrifice are different things – you cannot serve from an empty cup! You are in the service industry, not the sacrifice industry. Some entrepreneurs that Jess and Margy meet don’t know what their numbers are, or what their revenue is, never mind goals for how to manage their revenue. Profit First gives you very clear direction: “You can spend this, or you can’t spend this!”
It gives you clarity on what you can invest in and where the money is. Profit First also allows Jess and Margy to be creative with their money and find creative ways to keep the business going.
John brings up the point that when you use Profit First, whatever dollar amount you see in your account now, that’s the money you have because everything else went into different accounts for different obligations. This gives you freedom and allows you energy from being financially organized.
This makes you become innovative with your money, which will put you ahead of your competition! That will keep you always doing something new, which in turn, is making your business better and stronger.
You can connect with John at incitetax.com!