Finish the Year Strong: 5 Smart Money Moves Every Small Business Owner Should Make Before December 31

Speaker A00:00:00

Well, hello there, friends, and welcome to Grit and Growth Live Business Tonight. Well, I'm so happy you chose to join us. I'm Ralph Estep Jr. I want to encourage you right now to feel free to join us in the chat.I want to welcome Abby, my producer. She'll be moderating the chat tonight.So if you've got questions or you've got comments or if you've got things you want to answer or be answered on the show, feel free to reach out and put them right in the chat. Let me ask you this question. Have you ever hit October and thought, wait, where did the year go?Well, if that's if you've ever thought that this show tonight is for you, because tonight I'm going to get into five smart money moves to help you finish 2025 strong and set yourself up for a powerful start to 2026. Now, before we get into listener questions tonight, let's start with what's on every business owner's mind this week.This is going to be my pressing issue of the Week section. Like I talked about last week when we launched a live show each week I'm going to start with what I consider the pressing issue of the week.Are you ready for it? Well, this week my pressing issue of the week is the credit crunch. The truth is, if you look in the market, rates are still climbing a bit.Lenders are tight.Now, I'm hearing this from clients every day that as they're putting in applications, as they're trying to get lines of credit and credit cards, lenders are tightening up right now. And the problem with that for most small business people is they're starting to feel the squeeze.So tonight I want to start by answering this question. What can you do when access to capital gets harder?Because if you look around right now, credit card and loan rates are actually increasing a little bit. I looked at this earlier and there's been a 1 or 2% increase since the summer.I've had a few clients out getting auto loans and truck loans for their business and they're seeing a little bracket creep in that as the rates are starting to go up. And the truth is they're also telling me this, banks are getting a little pickier with both renewals and new applications.The finance guys are telling them, listen, this is what I'm seeing from the banks. And now some of that's a little bluster, some of that's a little game playing.But I do think that there is a little bit of this credit crunch happening right now as People are not sure exactly what's going to happen with the, with the market, especially with the capital markets. And the truth is many small business owners rely on credit to bridge seasonal slowdowns.This could be a time of year when you're starting to feel that seasonal slowdown and you might be getting hit with that cash flow crunch right now. So, alright, so let's start off with some basic gritty moves that you can do to deal with this credit crunch.The first thing I'm going to do, and it's going to be kind of counterintuitive if you want, but you got to think about building liquidity before you need it. You know, here's the problem with credit. It's and I'll tell you this from my personal experience, it seems like when you need it, it's harder to get.But when you don't need it, man, they're sending those applications to you left and right. So one of the things I'm going to tell you to do is start to build that liquidity, start to build that cash.We talked last week on the live show about how to build that reserve. This is a great time to build that because even small percentages will add up over time. And guess what? The banks love to see that.I used to work as a credit union executive and one of the things that I always looked at was the liquidity of a customer when they came in to get a loan. The truth is, banks don't want to lend to you if there's blood in the water, if they think there's a problem with your financial situation.So if you can grow some reserves, if you can grow some money, put it aside, put it in a savings account or reserve fund is going to help you during, with those deals, with those credit crunches. So that's the first thing, build that liquidity before you need it.Second thing I'm going to encourage you to do, and this is kind of a no brainer from us accountant guys, strengthen your financial profile. It might go without saying that if you have clean current books, that's going to give confidence to the lenders.I was talking to a client just yesterday and he says, Ralph, I'm trying to go get a loan at the bank and they're asking me for a profit loss statement, they're asking me for a balance sheet. I'm like, yeah, of course they are. Those are the financials that you need. He says, well, can you do something like that for me?I said, certainly I can do that, but you need to start building in momentum. Start building in those habits to be checking your financials.And listen, if you're not doing them, find somebody to do the financials for you because the more strengthened you can give your financial profile, the better you look for the banks. It's just the truth. And the third thing I'm going to encourage you to do is diversify funding. Now, what am I talking about here?We always talk about building relationships with our customers.It's a great idea to build relationships with banks and with lending institutions because the more relationship you have, the more flexible you can be. If you find yourself in a credit crunch, you know, it's one of those things where it's good to have friends.So I encourage all my clients all the time, go out there and find those relationships, talk to different banks, get different credit cards, all the things that would be helpful to you. But build that diversification up when you can. Because here's the deal. We talked about this last week.When you're in business, there's only so many things you can control. But the things we talked about tonight, these are things that you can control. Good cash habits, clean data and books.All those things leverage when credit gets tightened and you can jump in and maybe take advantage of some of those things. So that is my big thing for tonight. Let's jump into our first question for tonight.And by the way, if you've got a question for the show, you can type it right into the chat window. If you're not catching us live, you can always send us a question by going to gritandgrowthbusiness.com ask again.That's gritandgrowthbusiness.com ask. But if you've got a question, join us in the chat tonight. Abby's there monitoring it and she'll let me know.We got a question, but let's jump right into about taking control. That's what we're going to talk about on tonight's show.It's a big conversation about how to take back control of your business with some practical steps that you can start this week. As I said, let's get into our first question. The first question comes to us from Kevin from Denver, Colorado. And Kevin writes this.He said, hi, Ralph. I've heard you talk about having a reserve fund for the business, but honestly, it feels impossible.Every dollar I earn goes right back into operations. And here's Kevin's question. How can a small business like mine realistically start building reserves without hurting cash flow?I love this question, Kevin, and thank you for sending it over. It's A question that a lot of small business people are asking us all the time.First thing I'm going to tell you to do, and this may seem like, oh, that's a no brainer, Ralph. Acknowledge the reality. We're living in a reality many small business owners feel like saving is impossible.I was just meeting with a client this evening right before I went on to record tonight's show or to be live on the show tonight. And we were talking about that cash crunch. We were talking about trying to save money. It is hard.You just have to acknowledge that reality as you're building a business, especially when you're first getting started, it can be really problematic to try to build that cash reserve, if you will. Hey, just like a person, when you're building that emergency fund, it works the same way for businesses. So first of all, acknowledge this.This is not a battle that you're fighting alone. But second thing I want to encourage you to do is, is redefine a goal. Or maybe you don't have a goal at all. We'll start by setting a goal.You don't have to start with some big pie in the sky number. It could be something small, maybe just a couple hundred dollars in a reserve account. Maybe you have a goal to build that up over time.Here's what I can encourage you to do. Start with just 1% of your deposits.So every time something comes in, maybe once a week, maybe Friday mornings, you say, okay, this is my time to carve up some money. Start with 1% of what came in this week automatically. Put that in that reserve account. Just say, hey, I'm going to make this a habit.I'm going to sort of make it automatic. Just do that and you'll start to see that grow. And we're not talking about 10 or 20% at a time. Just 1% of what you brought in this week.Use automation to remove that decision fatigue.Because here's the thing, most small business people, I'm one of these people, by the time you get to the end of the week, you're thinking, hmm, I got this bill coming up. I, I just met payroll today. Man, I could use a little breathing room.But if you care, if you create this goal for yourself, if you create this automation, look, here's the deal. Every Friday I'm going to take 1% and put it into that reserve fund. You're building up that peace of mind, not just an emergency fund.Because here's the truth. Even $500, $1,000, $1,500 can be a Big boost for you and in those times of stress will help you make a better decision.It helps stabilizes the decision. So I got a question for the chat here tonight. What's one thing you've done to build a cushion in your business?If you've got an idea or something you've done in your business, I would love to hear what you've done in your business to help build that cushion. Because, listen, this is one of the benefits of the live show. We can all learn from each other and see what's working for other people.So if you've got an idea, if you've got something that you've done in your business, what, what's one thing you've done to build a cushion? Put that right in the chat. And we'll mention that as we move on to our next question. Well, let's get right to our second question for tonight.And our second question from tonight comes to us from Jasmine. Now, Jasmine's coming to us from Raleigh, North Carolina. I was actually just in North Carolina just a couple weeks ago.I was with my friend Mark and some other friends at a podcasting convention. It's actually the first time I spent any time in North Carolina. What a beautiful state. But let's get to Jasmine's question. Jasmine asked this.She said, hi, Ralph. My bank offered me a line of credit, but I'm nervous about taking it. I don't want to depend on debt, but I also don't want to miss opportunities.And here's Jasmine's real big question. How do I know if using a line of credit is a smart move or a risk? You know, Jasmine, that's a really great question.It's a question I get asked quite a bit, actually. And it really is one of those things that can be a tool. This is the thing. I don't want it to be a crutch.It doesn't have to be a trophy, and it doesn't have to be a trap. It can be a tool. It can be a great tool.If you find yourself in that position where maybe you're struggling a little bit, it helps to build that diversification. I have many clients who have a line of credit. It doesn't mean you have to go use. That's the beauty of a line of credit, actually.Once you get past the application process and they may charge you a fee to do that. Once you get past that, it's there for you if you need it.Rather than making bad decisions like these accounts receivable loans or putting money on a credit card. All of these things can be really beneficial for you and a line of credit is a great thing.Now here's some point of view I think you need to consider. You asked me basically, is it healthy or is it a trap? Is it a risk? Well, it can be.I know other clients who have used these and they became big traps because they just kept hitting that line of credit. After a while the bank's like, wait a second, you need to pay this down. Generally they want you to pay that thing down to zero within 12 months.So I believe the healthy use of these line of credits are for short term cash flow or return on investment positive opportunities. What am I talking about there?Let's say that you are a contractor and you're putting together a big job and this job is going to be profitable for you. First thing, is it going to be a profitable job? If it is, let's say, okay, fine, I got this profitable job, Ralph.I need to get all the material for this job. I need to get ready for this job.I, well, that's a great time to use your line of credit because you've got to buy materials, maybe you've got to front some of the labor costs, maybe you got a front permits and all that kind of thing. But you've got enough income built into this job in the back end that this thing is going to make sense.Just factor into that, that you've got that interest you're going to pay. But see, that's a healthy use, a short term use for cash flow. But here's where it becomes unhealthy.And I've seen this way too many times in my own practice. It's unhealthy when you use those funds for losses or bad habits.One of the biggest horror stories I've ever seen is I had a particular client, his business wasn't doing well and he was catching a lot of pressure at home. He needed to keep bringing home that paycheck. One of the things that he did was he started paying himself from his line of credit.I'm talking about red flashing lights. That's not a good plan. You're funding a loss, all you're doing is just adding more debt. That's really a bad habit.So how do you discern what's the right thing to do? I came up with three factors tonight to help you figure out whether a line of credit is perfect for you or not.First factor I'm going to encourage you to do is purpose. Listen, if this is a loan for growth, if this is A loan where you've got a great plan. Here's what I'm going to use it for.Maybe you're doing a marketing campaign. You want to front some money for that. If it's going to be a positive return on your investment, it.If it's going to bring growth to your business, then that's a good purpose. Here's where it's not a good purpose if it's for survival. Now you might be saying, ralph, wait a second.This means if I don't, if I don't take this line of credit, my business might fail. Yes. I'm going to say that that's probably not the best purpose to use it for. You might have to look at some other options.We kind of talked about those last week. Do you want to sell some things? Do you want to have some sales? Reach out to your best customers and try to grow some quick revenue?What are your big heavy hitters that you can do to bring some revenue in? I honestly don't think that using a line of credit for survival is a real smart choice. So first thing, purpose. If it's for growth, I say thumbs up.If it's for survival, I say thumbs down. Gotta get my thumb here on this picture. Thumbs down. So growth, Thumbs up. Survival, thumbs down. All right.Second thing you want to look at are the terms. This is one of those things where, again, not a real big, not a real smart thing here, but look, what's the rate?What's the interest rate you're going to charge? Or what's the interest rate they're going to charge? What's the repayment terms? Are there any renewal clauses?A lot of people don't understand this with line of credit, and actually got caught with this one myself. I had first started off in my own practice and the bank was like, hey, we want to give you a line of credit.It's going to be SBA back to like, this is fantastic. And I use it as an opportunity to go buy some new equipment, I bought some advertising, all these kind of things.Well, I didn't redefine print and I had to pay that thing down within 12 months. Or guess what, they're just gonna get rid of the line of credit. Now what they end up doing is what's called termin it out.So basically they take whatever's left on that line of credit and they say, okay, great, now you've got a five year loan. Here's the zinger of an interest rate. You got five years to pay it back.But the other Problem with doing that is you severed that loan opportunity with a line of credit. They're not going to let you do that again. So be aware of the rate, be aware of the repayment terms, and be aware of that renewal clauses.Like I said earlier, I think with a line of credit, you really want to focus on being able to pay that down within 12 months. If you can't, I would look for other options. Now, I'm not saying the other options are good credit cards or accounts receivable loans.Those things are nightmares. But understand those. And number three, and this goes without saying, of any business loan, what's your plan?Whether that's a term loan, a credit card loan, what is your plan? You got to be asking yourself this, how fast can you pay it back? Because here's the deal. Banks want to give you money.They make money based on you needing money. That's how they make money. They charge you interest. Banks don't necessarily want you to pay it back in the short term.They want you to pay it back eventually. If not, they got a charge off, which is not good. But in the short term, they want you to take that money and just keep feeding that right.But you've got to be thinking differently. You've got to be doing a different mindset. Your mindset needs to be, how fast can you pay it back? Just spent a couple of days with my oldest son.He had come down or come up to visit us and we were talking about credit cards. And he said, dad, he says, I pay my credit card right away. He is being wise in using his credit. See, he's got a plan.He uses it for the points, he uses it for the rewards. Let me tell you right now, my son is amazing with the rewards. We were out shopping and he's like, dad, did you know you can do this? And you can.We actually happen to have the same credit card. But my son has a plan, he knows the terms and he's got a purpose. You've got to do the same thing with your business. How fast can you pay it back?Because that's the game. I hate to say it that way, but it's really a game in general terms.If you're going to lose your line of credit, like I said, I think you got to completely pay that back within 12 months. But I honestly think in your head, you got to be thinking 60 to 90 day turnaround. Let's go back to that example I talked about earlier.If you're fronting a business project, you've got a project you're hoping within 90 days to get paid for it or at least get some money coming in. Here's nothing to be cautious of, variable interest rates. Take a look at that loan and see is it a variable rate?Because if we get into a time of inflation where interest rates are going up, you might have that line of credit and man, that thing's on like a starship going forward and the rates are just growing and growing. So let me ask you this, I'm going to ask this in the chat. Have any of you used one of these line of credits before?And was it helpful or was it stressful? If you've ever used one of these, I would love to hear from you. Tell me what you think about a line of credit.Actually, my massage therapist just got one from her bank and she actually didn't understand how it really worked. I think the bank didn't do a good job of this.So if you've ever used one, it's a great opportunity to tell us in the chat if you've ever used one, what your experiences was with it. Here's one thing, a little, little pro tip.If they give you a line of credit, generally they're not going to want you to be charging directly to that. What they basically want you to do is take advances.This is where my massage therapist got a little bit mixed up on it because they didn't really explain this to her. It's not for you. Don't use it like a credit card. What you basically do is say, okay, let me give myself an advance on this.So get all your spending in order, get that plan together and then do an advance on your line of credit. But have in the back of your mind, I'm going to pay this back when this happens or when this happens. Not long term, but short term.Thank you for your comment, Mark. I appreciate that. Yeah, it's one of those things where, Mark, some people use these line of credits in the business.If you're a super small business, a lot of times your line of credit is a credit card. But these line of credits can be helpful.So to answer your question, Jasmine, they can be smart moves, but just understand what you're getting into before you get too deep into it. All right, so let's move on to our third question for tonight. And our third question tonight comes to us from Malik in Chicago, Illinois.And he writes this. He says, hi, Ralph, I got a few negative reviews recently and it really stung. I tried to do right by my customers, but some comments feel unfair.And he asked this question, how do I respond without sounding defensive and actually turn it into something positive? Now, it's funny.Abby and I were doing some planning for the show this morning, and we started talking about this question, and I said to her, I said, I can still remember, man. It's probably been 20 years ago or even more than that. I got my first negative review. I'll never forget. It was a situation.I was doing a tax return for somebody, and they just did not want to hear what I had to say. Every single thing I said was a problem.It got to the point where actually, in my lobby, I'll never forget this one Saturday afternoon, they came in to pick up their tax return, and they couldn't believe they owed money. They couldn't believe that I actually wanted to charge them to do my work, even though they owed me. I guess they had this belief that.That if they owed money, they weren't going to have to pay. Well, needless to say, they were not happy campers.And it's kind of funny because there were some people sitting in the lobby and they were just taking all this in. And I remember I took them back to my office as soon as these other folks had cleared the lobby, and they said, man, what happened there?I laid it all out for them. Well, it wasn't. An hour later I got a ding, ding, ding in my email box. I'd received a completely negative review on.It might have been Google or one of the other review sites. And I got to be honest with you, I was devastated by that. So, Malik, I understand how you feel.Like, I looked at that, I'm like, I can't believe these people. I did exactly what I told them I was going to do. They signed their engagement letter. I did all the right things, man. I did every.Listen, the truth is, in this particular case, I saved them a ton of money by doing something interesting and I'll say aggressive tax strategies, but they didn't want to hear it.What turned out to be funny is that that same client that saw that blow up in the lobby without me even asking, within an hour had posted a completely different review. And I guess they felt bad for the situation, so they actually made a comment about that last person that reviewed.Here's the part they didn't tell you. So I kind of had like, a brand ambassador going on, a battle going on. But I got to be honest with you, I reached out to my marketing people.I said, we got to get this off the website. This needs to go. And the marketing people said to me, no, wait a second, Ralph, you're looking at this wrong.It's perfectly natural to get a bad review from time to time. Now listen, if all of your reviews are bad, you got a problem. But they said a bad review shows that you're human.But let's talk about how do you deal with this? Because I'll be honest with you, I didn't deal with it. Well, first thing I'm encourage you to do, start with empathy.Negative feedback hurts, doesn't it? You work so hard in your business, you're trying to make it work. And when you get a negative comment, man, of course you're going to get defensive.You got the hands up, you're ready to box, right? But start with empathy. Empathize with the person that wrote that review and think about changing your mindset.See, this was all this all comes down to. Most things in business are about changing your mindset.See, most people hear a negative review and they think, hmm, how am I going to get back at this person? I got to get this off my website. This is terrible. But I'm encourage you to do something else. When you get that negative review.Just think about it as data. It's information, it's feedback. It might be tough pill to swallow, as they say, but use it to think about this.I'm going to come up with an acronym called Acknowledge, thank and Act Method. It's the Acknowledge, thank and act method. This is what I have used in my own practice and I found it really helpful.When you get one of these negative reviews, first thing I want to encourage you to do is acknowledge their experience. This is something they live, this is their experience. Whether you agree with it or not, their perception is their reality.The best thing you can do is start by acknowledging that experience. Hey, I understand what you did. Here's what I'm hearing you say, start there. Second thing I'm going to encourage you to do is thank them for sharing.I don't know if I mentioned it on last week's show or not, but there's a great book out there for business people. It's called A Complaint is a gift. And truth be told, if someone takes the time to share a review with you, thank them for it.Now you're saying to me, wait a second, Ralph, you're saying to me, I need to thank somebody that leaves me a bad review. Yes, I think you do. Because it could be. Just think about this for a second. It could be they're pointing out something you didn't see.See, as business owners, we have these blinders on. A lot of times we don't see the things that are right before us. And if a person took their time, listen. Because here's the truth.Most people now with this particular one I got, they weren't coming back. They were done. But I still followed this strategy. But here's the thing I want you to understand. Thank them for sharing that.Because they don't have to. They could just walk away. That's why this book is so cool.I think a complaint is a gift is huge because they're giving you a gift now it's your choice whether you want to use it or not. Which leads to the third thing. So acknowledge. Third, thank them. And number three, act on it.If you can improve something, some people want to complain, just to complain. You're never going to win that person, that particular client that I'm talking about, there was no winning that particular one.But there have been others in my career that they pointed out something that I didn't really think about as an accountant. Sometimes I talk in accounting ease, use big words and words that people don't understand.So one of the best feedbacks I ever got, somebody said to me, ralph, you know, you could dumb it down a little bit and dumb it down is probably not the right word to use, but you can make it a little simple. Let's say it that way. I thank that person for sharing that with me. Because there's something I could do with that I could act on that.There was a way that I can improve on that. So again, acknowledge, thank them and act on it. Here's one other thing I'm encouraging you to do.And listen, the devil almost got on me this particular day. But stay public, but professional with it. Because here's the thing I want you to understand, your future customers are watching.In my particular case, those other customers are right in the lobby and they were observing how I was handling this. And when they came back out of my office, they're like, wow, man, you practice a lot of self restraint to not go screaming at that person.I said, yeah, I hear you. They saw that. They've been clients ever since. That's probably been 25 years ago. Your future customers are seeing how you react to this.You can be public about it. You can be public. If their comment is public, be public about it. I'm going to tell you one thing.If their comment is private, don't go public with it.If somebody reaches out to you in privacy, sends you an email, send you a private letter, they don't post it online, they don't post it on your website. Listen, don't turn around and make it public because you're doing yourself a disservice. Address them individually.But if they're doing it publicly, my personal opinion, it's okay to go publicly, but stay positive about it. Stay professional. Another thing I'm going to encourage you to do is avoid long arguments.A lot of people get into these wars of they said this and they said that and they said, it's like you're swimming, right? You're just jogging along, you're pushing the arms back and forth. Simple, respectful. That response builds trust.And Chris says, you got a comment here. So what's the greatest failure as a small business owner and how did you learn from this failure? Let me answer that in just one second, Chris.But great question, but I want to continue to hear what I was talking about because it's going to kind of lead into that. But think about this. When you're addressing that, highlight that consistent, humble replies because customers are going to see that.So let me ask you in the chat right now, how have you handled tough feedback yourself? Which leads me to Chris's question. Now I'm going to try something here. Let me see if I can do chat question. And I am going to try to bring over.Let's see if this works. I'm hoping that it'll work. We struggle with this last week, but let's just see if we can make this happen.Well, it's not working, but let me see what Chris had to say here. So Chris says, what is your greatest failure as a small business owner and how did you learn from this failure?Okay, so I'm going to put my heart on my sleeve. My biggest failure as a small business owner is not understanding boundaries. I talked a little bit about that last week on the show.In a lot of ways, I didn't understand how important it was to make sure I was keeping time for my family. And this is something that a lot of small business owners don't get till it's too late. And I almost lost my family because of it.Listen to me, if you hear nothing else I ever say, the rest of my days in small business talk and go small business coaching. Take care of the people that care about you. Love them, but give them your time.My biggest failure in a lot of times was not giving them the time or if I gave them the time, it was kind of like, you know, quick time here, quick time there. I've always said to my children, hey, you know I've always was home for you at night, but didn't I have an honest.And they can say, dad, yeah, you were home sitting in your office, but she didn't really pay us any attention.So, Kris, that's my biggest failure as a human being and as a business owner is not really understanding the impact of what I was doing and how, you know, because the whole time I'm thinking, man, I'm working hard, my family's going to benefit from this. But your family benefits from you. Your family benefits from your time.Your family benefits from the care and concern you showed them because you want them to care for you. You, you want them to support you in your business. Well, guess what, that's a two way street and you've got to make sure you're doing the same thing.So, Chris, I appreciate you asking that question. It's something I don't talk a lot about.But I'm going to tell you right now, if you don't do that, it's going to lead to burnout, your family's going to abandon you and you're going to be working for nothing but yourself. And that is not a fun place to be. So, Kris, thank you so much for asking that question.And if you're a small business owner and your wife or your children are asking for your time, listen, do that, invest time. You can figure out time to work. You can do that after the kids go to bed. Carve out that time. It's so important, it's super important to do that.Don't let those things go by the wayside. Thank you so much for asking that question. Well, let's move on to our fourth question tonight. And the fourth question comes to us from Lisa.And this is from Seattle, Washington. And Lisa writes this. Hi, Ralph. I'm honestly terrified at tracking my business finances.I wait until tax season to check my numbers and by then it's chaos. I hear that. What's an easy system to stay on top of my money without spending hours every week? Well, let me just tell you something right now.Today is the 14th of October. Now the business filing tax deadline was actually September 15th.But just today, believe this or not, I am still working on tax returns for people who need to file by tomorrow. Some of those people are small business people. Turns out that they're doing it on their personal income tax return.And unfortunately this morning I had to reach out to particular clients and say, listen, I still need your income and expense information. This is 10 months after the close of the year. And guess What? They still haven't gotten their books in order. Not a good plan.So, Lisa, here's what I'm going to tell you. I don't think you have to spend hour upon hour every week.But if you're going to be a small business owner, you better plan on spending some hours every week, because it's at some hours that's going to keep you out of trouble. It's so important that you understand this because most small business owners feel the same way you do, Lisa.And then what happens is chaos at tax time.I don't know how many times in my 30 years of doing tax returns and working with small business people that it seems like they don't realize tax time comes the same time every year, but it turns into chaos for them. Oh, Ralph, I didn't realize you were going to need this. This is the same thing I asked you for.You know, listen, if you're a new business owner, I get it, maybe you didn't think about it. But if you've been around this block before, listen, you're not doing yourself any favors by wait until chaos.I'm going to charge you more because it's chaos for me, too. Guess what I learned a long time ago in my practice. I'm not living your chaos. There are things that you can do to prevent this.Let's talk about a couple of things right now, Lisa. Here's my encouragement for you. Carve out 15 minutes every week and build a routine.It doesn't have to be any more than that if you've got some good systems in place. And I'll talk to you a bit later about how you can actually set up a coaching call with me.This is one of the things that I do with my boss, my small business clients, is help them build a structure. Because if you have a structure, it's going to help with this.But honestly, once you've got a structure, once you've got good software, you've got things tied together. Like QuickBooks Online is great for this. They have this thing called bank feeds. You can literally connect your banks and your credit cards.And guess what? While you're sleeping, those transactions are coming into your QuickBooks file. And then you can take 15 minutes a week and just categorize those.But it needs to be weekly because I've got clients that we do that for. And guess what? They don't look at it until February or March of the following year.Then we're trying to figure out, okay, what happened last June, what happened last March 15th. You'll save yourself time in the long run. If you do it every week, that consistency will be huge. But here's the thing I'm going to tell you.You really need to track three things. Lisa, if you want it to be simple, track three. Listen, it's not complicated. This is not rocket science.What I do for a living, as far as the taxes and accounting side of financials, is not rocket science. We can get a little complicated when we do fancy financial statements and we're doing those things. But three things.You really need to track what came in. That's simple. What were the deposits? What were your sales? Simple thing. What got deposited to your bank account. Start there. What came in.Second thing, again, super simple. What went out? What did you spend the money on? Did you write checks? Did you use that credit card? Did you use that debit card? Do you have ach.Did you have automatic drafts? What went out. Now, of course, we got to think about cash here for a second because maybe you're putting cash out. Better have some receipts for that.And then the third thing is just the difference between the two. What's left? See, accounting is really that simple. A lot of people get hung up on accounting. So complicated.It can be if you want to get real sophisticated. But from an IRS perspective, from a financial statement perspective, it's really pretty simple. What came in, what went out, and what's left.Now, there's some great tools you can use that I already mentioned. QuickBooks Online is one. Wave has a really simple process that you can use for those. And listen, it won't be that complicated either.You can do a simple spreadsheet. Hey, you can get pen and paper. I've got clients to this day that are still doing pen and paper. They've got a notebook.They start each week or each month with a notebook. They write in January, 2025, sales by day. Write it down. Here's all my expenses. Buy expenses. Add those two things together, that's what's left.It's really that simple. But that is information you need. Don't wait till the end of the year.Don't wait till the 18 months after the end of year like so many small business clients do. Here's another thing I'm encouraging you to do. Hire somebody. Hire somebody like me. It's a lot less expensive than you think.A lot of people think, oh, if I'm going to hire an accountant, it's going to cost me thousands and thousands of dollars. That's just not true. You can find an accountant. I'll be happy to talk to you.I'll talk to you a little bit later about how to set up a discovery call with me. Or maybe you hire somebody part time to work right there in your shop again. It's not going to cost you a minute.If you've got a system in place, it's a small investment, but that investment will pay off big time. Because the other side of that is if you don't make that investment, you're in the dark. It's like riding around in fog with no headlights on.You're going to get lost. You're going to make bad decisions. See, when you don't have that clarity, you make bad decisions. We talked earlier. Let's control what we can control.You can control your books, you can control the accuracy of records. All those things are within your control. It brings big clarity. But. And you don't have to spend a whole lot to do it. It's really that simple.See, financial awareness reduces stress and it reduces painting. Now, it looks like we've got a question here. This is from Chef. No drama. I love that name.Says, I have structured business proposal, plan, blueprint, categorized and can be turned into a book. But I don't know what to do with all the information I compounded over the years. Five years of research and roles.Okay, so Chef, let me see what you're asking me.You've got a business proposal, plan and a blueprint categorized can be turned into a book, but I don't know what to do with the information I compounded over to five years of research and notes. Let me ask you this question, Jeff. What exactly are you trying to do? Are you trying to open a business? Are you trying to start a business?Are you trying to get funding for a business?If you could just add that to the chat, I'd be happy to answer that question, but I sort of need a little bit more information so that I can understand it because, I don't know, maybe you're trying to write a book. Perhaps I've done that. That's kind of a fun thing to do. But let me know in the chat exactly what you're asking me there.But let me ask this question as we're talking about this, keeping your books in order. Let me ask the chat right now, is there an app or a method that works for you if you've ever used a method that works for you?Again, maybe that's quickbook Waze. Maybe you're one of these folks. Pad and paper spreadsheet. Listen, I've got clients that still use shoeboxes, all those things are legitimate.As long as you're keeping on track of them. Don't bring your accountant the day before tax season to get ready to end a box of receipts all mangled up and taped with some duct tape on top.It's not going to be a good experience. And plus, not even that. So don't even worry about me. Don't be worried about the accountant.You're not able to make good decisions if you don't know what's going on during the time when you're doing that business. So in chat, if you've used one of these methods, you know, feel free to put in there what method has worked for you.And then we're getting ready to move on to question five. But, Chef, no drama. If there's something that you want me to answer, I'd be happy to answer.I just need you to give me a little bit more information there so I can honestly understand what you're asking me. Well, let's move on to our fifth question tonight. And our fifth question comes to us from Ben from Phoenix, Arizona.And Ben writes, he says, hi, Ralph. The end of the year always sneaks up on me. Yeah, it seems like it does that to a lot of people.I end up rushing my reports and missing chances to make smart financial moves. What should I be viewing now so I can close the year strong? Ben, that is a perfect question for tonight.And it's a question that a lot of people don't think about. I work with clients on a monthly basis. One of the things, big things we do in our practice, we have what we call monthly fixed fee clients.Well, we give them a basket of accounting services. We keep track of their books month to month. We do their account reconciliations. We do their payroll.One of the things we're doing right now is we're starting to look at year end in October and November. That's when I'm starting to see more clients. We're thinking about what's the financials going to look like?More importantly, what's the taxes going to look like? Are there some things that we're going to be able to do to help get us to the end of the year? And I see your comment, Chef.I will get right to that as soon as we finish up this fifth question. But start thinking about that because this is the question that every business owner should be asking right now.If you're a small business owner, you should be leaning into Ben's question because this is the time to make some decisions. What do your financials look like for this year? What does your tax burden look like? Are there some things you can do?Do you want to put money into a retirement account? Is there some spending you can do? Is there something that you can do to help improve your year end?Here's one of the things I'm going to tell you to do. I put together a simple year end success check in. It's pretty straightforward, but here's the things I'm going to tell you to do.And as always, I forgot to mention this earlier. If you want to see the show notes, we'll post this show again. It'll be released next Saturday.It'll be released on our channel, gritandgrowthbusiness.com and we'll have show notes that'll have all this information in it. And if you're looking for one of our action sheets, you can get those by going to gritandgrowthbusiness.com action.But anyway, let's get into my year end success check in. First thing you want to do, the main component to this is a profit review. Take a look at your business. What worked this year? What wasted time?What wasted money? It's a great time to do that. Go back while it's still fresh and look at the profit. What could you have done better? What things were home runs?What are those revenue things that are just working fantastic. What are those expenses? I was just meeting with a client today. We talked about he spent a lot more on advertising.And I said to him, how'd that work out for you? He says, ralph, I really don't know. I used an analogy. I said, it's kind of like throwing spaghetti at a wall. You're not sure what worked.This is the time to think about that. So start off with that profit review. Second thing I'm going to encourage you to do is do a tax strategy.This is where you come and meet with somebody like me and do it early. You don't want to wait till December 31st and go, hey, Ralph, what do I do? I got 10 hours left. Not a good plan.A lot of small business clients do that. This is a time to start doing it in October and November. Talk to your accountant because there's still time to plan.There are still things, what I'll call gritty moves that you can make before the end of the year that could have a real big impact on your tax return.Maybe you prepay some expenses, maybe you put some materials in your shop, maybe you go buy that vehicle or that equipment that you can get a tax write off for maybe you've had a fantastic year and you're like, ralph, I gotta figure out a way to get this tax burden down some. So talk tax strategy. If you don't have a tax person again, I'll encourage you. You can schedule a discovery call with me.I'll talk to you about in just a few minutes how you do that. Or you can see that in show notes, but do that, reach out to your accountant. If you don't have an accountant, it's a good time to find one.Third thing I'm going to encourage you to do is a debt strategy. We talked about debt earlier in the show. I just recorded a show about good debt versus bad debt. But it's a great time to continue your debt strategy.Think about paying off or restructuring that high interest debt. What is your plan for that? This is a great time to think about that plan. You're going into a new year. You're finishing up this year.Maybe for you, it's like, Ralph, I don't want to go into another year having this big mountain of debt in front of me. Start thinking about that strategy. Maybe this is a time where you've got some extra cash. Maybe start to pay down some of that debt.Another thing I would encourage you to do. We talked about this at the beginning. It's a great time to look at your reserves, Top off that cushion before year end. Because that's the thing.This is the time to do it. Build that reserve fund. Look and see. Okay, what do I need to do before the end of the year to really set myself up for a successful new year?And finally, a lot of people do this. You know, on the personal side, we do this. We those New Year's resolutions. Well, you can do the same thing in your business. Think about goals.Maybe you pick one measurable financial goal for the first quarter and say, here's what I'm really going to focus in on. Or maybe there's a couple goals. Look at your financials, look at your profit loss statement.Maybe this is a great time to do a budget and compare your budget to your actual results. Because here's the truth. Finishing strong means starting January clear and confident. You can finish strong. You can do this.Well, let me get back to Chef Nodrama's question. He gave us some more comments here. Let's see what he said. Okay. He said, here we go. So I'm trying to get funded as well. Searching for partnerships.I have a whole system for a $50 million EBITDA okay. And it says, I started out with one food crock and expanded too fast into my second, let's see, food truck.I had no system, and I didn't manage working capital effectively to claim some learned flaws with opening my first business on my own. Yeah, I hear you, my friend. That is no joke. What you're really talking about there, Chef, is scalability.And a lot of people get themselves in trouble here. It's easy to find yourself in that particular situation, Chef. So I feel for you. I'd be happy to sit down and talk with you.We can see if there's some things that I can do to help you get back on track. But I. Working capital is tough, and if you've gone to. I see this all the time, actually. A small business client will grow too fast.And my grandfather used to say, get too big for your britches. It's real easy to do that because you see this, like, you might have that first food truck, and things are really taken off.You're like, oh, this is going to work out great. And you think, well, I can double this. I can triple this. And you go out and get that. And I'm not criticizing you, by the way.I'm not sure your exact situation, but it sounds like that's what really came into it. Then you had another truck payment. Maybe you had another crew on the road, and things didn't go exactly as you thought they would go.That's fantastic. But, see, you gotta scale up to that. A lot of people think they're gonna go from zero to a hundred in three seconds.There aren't too many cars that go that way. And guess what? There aren't too many businesses that go that way either. You really have to have a plan. It all comes down to planning.It all comes down to a strategy. And to grow not too quickly for yourself. That's a lot of. Listen, to be honest with you, I. I see this happen all the time, and thank you.I appreciate you saying that. Shep. Yeah, I am absolutely right. This is not my first rodeo, first of all, but for 30 years, I have. I will tell you this.The biggest struggle I've seen most small business people go into is growing too fast. I'll give you a great example. I guess it's been about 15 years ago. I had this neighborhood friend of mine. He had just.He had been working for somebody else, and he decided, you know, I'm going to start my own business. I said, okay. So he came in to meet with me.I was kind of surprised because we Were kind of like those neighbors, like, we throw the hand up, how you doing? But never really thought that he was really interested in my service.But he came in, we sat down, he paid for a consultation, and he said, listen, I'm gonna go out on my own. I'm gonna start my own business. And you know what? This contractor I work with, he's gonna feed me a lot of business. I said, okay.I said, that sounds good. But the first thing I said to him is, I said, how much cash do you have sitting on the sidelines? He goes, ralph, oh, I'm in good shape. They love me.I said, no, that's not what I asked you. How much cash do you have sitting on the sidelines? And he goes, well, I got about three months. Well, I should have known better at the time.Him and his wife were both sitting in front of me, and his wife put back this eye roll. Like, would have, like, put you into Stoneman. She's like, oh, this. And I'm thinking, wait a minute, I think this guy's pulling my leg here.He doesn't really have the money that he has. And I said to him, I said, dude, listen, I think you really need to think this through.I said, you're taking and leaving a W2 job to go work on your own, Which I commend it. Listen, I help people do that every day. But then I said to him, what does this look like? He goes, well, here's what I'm going to do, Ralph.I'm going to go buy five trucks, I'm going to put five crews on the road, and, man, I'm going to set the world on fire. He had a million dollar plan. And I said to myself, it's funny because it was kind of early in my career.I said, you know, I think this is going to be a disaster. But I didn't want to crush this guy's spirit. But I kind of did. I was like, real transparent with him. I said, dude, I think you got a problem here.I said, I don't think you have the money to do this. Well, with that, he got all kinds of mad, stormed out of the room and said, I've heard enough.His wife just sat there and we kind of had a little conflict. We had a little conversation. And I said, he doesn't really have that much money, does he? She goes, no, but he's got big dreams.And I said, well, big dreams are cool. Listen, I think big dreams are great, but you gotta have the plan in place. So he decided. He huffed and Puffed a little.I came back in, sat down, and I said to him, listen, I can help you do this, but I really think you need to grow one truck at a time. And he says, okay, well, maybe I'll try that. I can do one truck at a time. I said, okay, well, listen, here's what I want you to do.Build a plan to grow one truck every six months. And I know the wheels were turning in his head. He's thinking, yeah, but if I do that, then I'm not going to be able to make as much.And this guy had a great idea, he had great plans. But before he left my office that night, I said, listen, if you don't do what I'm saying, you're going to be out of business in six months.Honestly, at the time, I thought he'd be out of business in three months. Well, fast forward two months later, phone call, hey, can we come in and meet with you? But this time it wasn't just.It wasn't both of them, just the wife. Wife sits down in front of me. She got tears in her eyes. I felt so bad for this woman. She goes, ralph, we're losing everything.And I said, what happened? She goes, remember when we were in here and you told my husband to grow slowly? He didn't listen to you, Ralph.He went to the car dealership that next day, and they had a great deal on these trucks. He bought five trucks, Ralph, and he bought the racks for them. I can't remember exactly what. This guy did something with new construction.I think he was the guy that did all the finishing out. He put the. The things in the bathrooms, like the towel racks and the toilet paper holders and the shower doors. Again, this was in a time in, in.In the business where things were booming. There was a lot of people building houses.But the thing I knew about that industry is these contractors, these general contractors, these home builders, they had to sell that house before he got paid.And I knew right away he was going to be fronting car payments and truck payments and loan payments and all his capital costs for the knickknacks, the thing he had to put in the house, plus all the labor costs. So I knew it right at they were going to string him out 120, 180 days, and sure enough, took two months. And that's where they were.They tapped into their home equity. They went through all the cash they had, and they were at the point. She was actually sitting in my office. How do I get out of this, Ralph?And honestly, at that point, I didn't have a lot of tools for them. I said, you're in a bad spot now. I never heard from them again. I don't know what really happened there. It's one of those tough love situations.I just said, listen, I thought this was going to happen, but we need to go figure this out. But. So that's the thing. Let me read. So, Chef, that's exactly like my story. Besides me having someone be as transparent with me.Yeah, that's the problem, Chef, is a lot of business, client business coaches and accountants, they don't understand that you have to be restrained in this. They. Because here's the deal, dude. They want you to grow and grow and grow. Because, listen, if you grow, they can charge you more fees.That's not how I've grown my business. I want you to be successful because I believe a win win is the only way to really get ahead.You said my plan was to open a new truck every year, but because it was going so well, I opened a second truck my first six months without placing a system. Yeah, that's the problem. And I'm sorry you had to learn that way, dude, but lesson learned and I hope that you can recover.Like I said, feel free to reach out to me. I'd be happy to do a discovery call. There's no cost for that. I'll share with you in just a few minutes how to do that, Chef.But, yeah, I see this time and time again. And the problem was you get burned out with that.You get all these overhead payments, you get those truck payments and the insurance, and then you're putting labor into. Really comes down to making sure you're measuring one thing at a time. So thank you so much, Chef, for the question tonight. That was really helpful.I hope our audience has benefited from that as well. Because, listen, you're not alone in that. It is a very common scenario. Now, while I'm talking right now, I want to mention one more thing.Every day or every week, excuse me. I do a live show every Tuesday night, and then I also release a recorded show. That recorded show goes out every Tuesday morning.With that recorder show, I'm going to encourage you to check them out. You can go to all of our shows@gritandgrowthbusiness.com but here's one of the cool things I do.Every week when I record a show, I create an action plan. This action plan gives you some gritty things that you can do right away to implement in your business. Kind of my free gift for you.You can get a copy of those action plans by signing up. You go to gritngrowthbusiness.com action. Again, that's gritngrowthbusiness.com action.You go there, enter your email address and and you can download all of our action sheets. And here's the cool thing. Once you sign up every week, when I release a new one, you're going to get it.Now, we talked a little while ago about coaching services. A lot of people are overwhelmed by this.I think, chef, you'd be a great candidate for this if you're in business, if your business is struggling or maybe you're just thinking about going into business. Maybe you're tuned in today or watching this live and you're thinking, rob, I'm really thinking about going into business. Can you help me with that?Things I'm going to encourage you to do is reach out to me. Go to gritandgrowthbusiness.com coaching. Let's schedule a discovery call. It's just 15 minutes. We'll talk about your plans.We'll talk about what I can do to help you so that you are successful. Listen, I've been doing this for 30 years. I've seen what works and I've seen what doesn't work. Help me. Let me help you coach into what works for you.We can talk about your why in your business. We can talk about your brand promise. I can help you build that plan to really grow well so that you can be successful in your business.All right, friends. Well, tonight we talked about rising rates. I gave you my pressing point of the week, how to keep yourself going when there's a credit crunch.We talked about building that reserve fund. We talked about those credit lines, how they're great to use but understand the why you're using them.Hey, we had a long discussion about customer feedback. I explained to you how the situation I went through how to resolve those things.We talked about financial tracking and we ended it with some year end planning. And it all comes down to this, encapsulated in just three words. Clarity beats chaos.I want to say that again because it's so important that you understand this. Clarity beats chaos. So I want to encourage you right now, thank you for joining me tonight. But take one small step this week.Whether that's building your cushion, cleaning up your books or reviewing your goals for next year. Listen, the end of the year is closer than you think. That's how you finish strong. You want to finish strong in your business.So join me next week again On Tuesday nights, 8pm Invite your friends. Coach thank you for all your comments. Mark thank you for your comments. Chris thank you for your comments and join me next week.We're going to tackle another real World challenge and I want to help you grow your business with grit and confidence. So thank you for joining me tonight and I'll see you next week on the live show. Have a great night tonight.

Speaker B00:50:29

Thanks for joining us today on Grit and Growth Business, the show where real business owners find the clarity, courage and confidence to build something that lasts. If this episode spoke to you, go ahead and hit that subscribe button so you don't miss what's next.Remember, success isn't easy and there are no shortcuts. But with grit, growth is possible and when in doubt, just Ask Ralph this show is a production of Ask Ralph Media supported by Saggio Accounting Plus.The content in this episode is based on information available as of the date of its release. Saggio Accounting plus and Ask Ralph Media, Inc. Are under no obligation to update it should circumstances change.Please understand this episode is not intended to be financial, tax or legal advice. Your unique situation deserves tailored guidance. So before making any decisions, consult with your trusted tax professional or attorney.