The Money Mistakes Boutique Fitness Studio Owners Make Without Realizing It with Danielle Hayden

In this episode of The Pilates Business Podcast, host Seran Glanfield sits down with finance expert Danielle Hayden to unpack the hidden money mistakes that many boutique fitness studio owners make without even realizing it. 

From relying on a bank balance to judge business health to overlooking debt, profit margins, and cash flow, this conversation shines a light on the financial red flags that can quietly undermine a growing studio. 

Seran and Danielle explore what Pilates studio owners, yoga studio owners, and barre studio owners really need to understand about their numbers so they can make smarter decisions, grow a more profitable boutique fitness business, and avoid costly mistakes that lead to stress, burnout, and financial uncertainty.

To learn more about Kickstart Accounting go here >> https://kickstartaccountinginc.com/

And get the healthy numbers info here https://kickstartaccountinginc.com/healthy

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Transcript

Bank Balance Versus Real Success

SPEAKER_01 0:00

There's that moment when you log into your bank account and you think, okay, I think we're doing okay. There's money coming in, classes are pretty full, clients seem pretty happy. But there's perhaps an uncomfortable insight that I want to share with you today. And that is that your bank balance is not an indicator of your financial success. And sometimes the numbers can look really healthy on the surface, but underneath, perhaps things aren't quite looking so good. So today we're talking about the financial red flags that so many business owners miss. The small ones, the subtle ones, the things that start tiny but perhaps turn into big, multi-thousand dollar mistakes. And I've invited someone in today who has made it her mission to help women entrepreneurs stop guessing with their money and start actually understanding their numbers. So if you'd ever thought, I know I need to understand my finances a little bit better, but I don't know where to start, then this episode is for you. Well, hi there, I'm Sarah Glanfield. I'm a business and marketing strategist just for boutique fitness studio owners like you. If you're ready to be inspired and make a bigger impact, you're in the right place. All you need are a few key strategies, the right mindset, and some support along the way. Join me as I share the real life insights that will help you grow a sustainable and profitable studio. This is the Pilates Business Podcast. Well, hey everyone, and welcome back to the Pilates Business Podcast. I'm Sarah and Glamfield. I'm the founder of Spring 3 Studio Business Consulting and creator of the Thrive Business Coaching Program. That's the program where I work with Boutique Fitness studio owners to build profitable and sustainable businesses that don't require them to work 75 hours a week to keep things afloat. Because the reality of this industry is that most studio owners didn't open their businesses because they love spreadsheets. They opened it because they love teaching, building community, and helping people find strength and happiness in their lives and in their bodies. But somewhere along the way, we know how that business side tends to perhaps take over. And suddenly you're the marketer, you're the operations manager, you're the scheduler, you're the salesperson, and the CFO. And that last one, that's often the one that gets the least attention. Not because you don't care, not because you aren't interested, but perhaps because you never were taught how to read the financial signals inside of your business, which is why I'm really excited about today's conversation. Today's guest is Danielle Hayden, the founder and CEO of Kickstart Accounting. Daniel, Danielle has over 15 years of experience in finance and has built her company around helping women entrepreneurs just like you stop winging it with their money and start actually understanding their numbers. And she's worked with hundreds of business owners, many of them in the boutique fitness space. Businesses that might look like they're doing great on the outside, but perhaps might have been missing things on the inside. So we're talking today all about some of the red flags that business owners, entrepreneurs often overlook and some of the indicators that something might not be quite right before a real problem really comes along. Because the truth is, as you already know, the earlier that you can catch some of these things, the more power you have to fix them. So, Danielle, welcome into the show. So glad you're here.

SPEAKER_00 3:44

Thank you so much for having me.

SPEAKER_01 3:46

So glad you're here. So quick uh update for everybody. So we're at episode 264 of the Pilates Business Podcast. And Danielle was last with us about two years ago talking um about all things finance as well. And I always like to bring people back on because the world changes, things have changed, and we're all continuing to grow. And I think, especially when it comes to talking about numbers, it's such an important conversation. So I'm so glad you're here. So glad you're here.

SPEAKER_00 4:12

Yeah. Most important topic. It's like it's the heartbeat of our business. And also I think the scariest and carries the most amount of shame. So it's a big topic.

SPEAKER_01 4:22

Oh, for sure. There's so much there. And I think one of the things that I see with so many studio owners is that they are so incredibly capable, so incredibly driven. Yeah. But the numbers often do feel quite intimidating. And so often sort of we rely on our gut feel, right? To sort of figure out how business is doing. So perhaps can you talk a little bit about what it really looks like to understand your numbers? What are you, what are you looking at? And what do you think we should be looking at a little bit more of?

SPEAKER_00 4:52

Yeah, I think that they we hear this air quote, know your numbers. We're like, okay, hold on, but what does that mean? Do I need to know how to work QuickBooks? Do I need to know how to export the reports? And I want to be clear that as a business owner, you should never be the one doing your own bookkeeping or managing the actual finances. It is your responsibility to understand the numbers at a high level and how to use them to make business decisions. I always use the example that, like, imagine me coming in and trying to teach a class. Like, right? Like, I don't know how to do it. I wasn't trained. I didn't go to school for it. Like you would be in the back, be like, oh my gosh, like, oh, the mistakes she's making, and this is costing my business real money. Well, that's what happens when a business owner thinks that they can do their own bookkeeping or Aunt Sally, the neighbor, can do the bookkeeping. I want to be clear your role as a business owner is not to understand QuickBooks. It's not to be able to manage every single spreadsheet or read every single spreadsheet. I want you to understand that it is only your responsibility to know what the income statement says and how you as a business owner and the CEO can use the income statement in the balance sheet to make business decisions that align your business with where you want to go in the future. Right. Absolutely.

SPEAKER_01 6:16

Interpreting the data versus perhaps getting the data and plugging it in. Yes, absolutely. What what part of it do you think that often is is most intimidating for most of the folks that you you tend to work with?

SPEAKER_00 6:31

Yeah. So I I believe that people kind of land in two camps. You're either like, I gotta know where every dollar is coming in. I need to know where every dollar is going out, like you obsess over the over the finances, or bury my head in the sand. I'm not sure what's going on in my finances. And the idea is to find the happy medium because you know, there's a lot of shame that goes along with money. Um, as entrepreneurs, we don't get to kind of like hang up the the the uh the cat as you walk in the door, right? Like you are bringing in all the money stories from childhood, your parents, the comments teachers made, that business you saw down the street fail. Like you're carrying all that into owning a business with you. And then you are now supposed to make data-driven decisions and operate and set the vision of where this thing's gonna go. Um, and so the process of understanding your numbers is to say, I have this data to be able to make decisions about my money. I'll share when um when clients come into their financial review call. So, as part of our services, we have financial review calls with clients. And so they'll come onto the Zoom Zoom meeting and I can watch them, like their shoulders are up to their ears, and it and there's so much tension. It's like, okay, tell me, tell me if I'm failing, tell me where I have to cut back. And I'm like, whoa, whoa, ease. Let's let's use this as a tool in the toolbox. Like nobody's coming to give us a pass or fail or to take away our entrepreneurship card. Like we we belong in this business and let's use it as a tool as a CEO to continue to grow.

Weekly And Monthly Money Routine

SPEAKER_01 8:16

Right. Absolutely, absolutely. So, what does it look like to perhaps be a little bit more on top of your numbers? What is that? What are the things that you're looking at, what numbers are you looking at to start with, right? I mean, I I often talk, you know, on here, people will, if you're if you're listening a lot, you'll know that I I encourage people not to just look at their revenue numbers to decide if their business is healthy or not. Um, so tell us a little bit about what you look at when you work with your clients and studio and and specifically studio owners, when you're thinking about finances and what data really is important.

SPEAKER_00 8:51

We, like I said, there's some of us who really enjoy this. So we can think about like all the information that we can look at. But I really don't want you spending more than 30 minutes a week looking at your financial data. Like as a seven-figure business, I spend 30 minutes every Tuesday with my leadership team looking at my finances. So we encourage our clients to do the same thing. I practice what I preach. Um, so for our our clients, we um for our premier clients, we do a weekly dashboard. And so in the weekly dashboard, we are looking at like this is executing the business. What do I have enough cash to execute the business right now? Like I'm in business mode. And so weekly, we're looking at our cash balance, what's coming in the business, what's coming out of the business. Do I have enough cash to continue to operate? Some other metrics that you might be looking at are probably more in your point of sale system in terms of class utilization, um, team utilization. So we're executing the business. Again, no more than 30 minutes. You're not the one completing the numbers, you're the one reviewing the numbers. On a monthly basis, this is where we start to zoom out and we say, okay, I need to look at my numbers as a leader. I'm gonna zoom out and look at this as a leader and a CEO. On a monthly basis, that's when we're gonna look at the income statement, the balance sheet, and the cash flow statement. Um, our clients at Kickstart Accounting, they receive what we call the snapshot, where we send them a CEO dashboard of what they're looking at. Included in the dashboard, yes, we look at revenue, of course. Okay, that's the fun stuff. We always start with the fun stuff at the top. Uh, but then we're looking at our cost of goods sold. Where are we spending money and do we have enough margin to be able to operate the business? Meaning, are we charging enough? Like, do we have enough cash in the business to operate everything else? Um, then we look at our operating expenses. I want you to at any given time be able to know the top five places that you are spending the most money in your business. And does that align with your goals? Right. That is so important. Yeah. Um, and then we have our net net income. Um, you mentioned it at the at the beginning. Profit is how we know if our business is healthy. So we have to know every single month what is our net profit in in the business. Um, I want you to continue to zoom out though on a quarterly basis. So each quarter, we need to look strategically at the business. So what happened? This is kind of like smoothing out the edges, the roller coaster ride of entrepreneurship. Some months are high, some ones are low. So each quarter we zoom back out, we look at year to date, we look at the quarter and say, what happened? Do I have enough money and savings? Like, do I have one to three months worth of operating expenses? Um, do I have enough to pay my estimated tax payments? Am I paying myself enough as a business owner? Do I am I paying myself enough? Um, and what is the debt in my business? Like, do I have enough cash to continue to sustain this business? So again, we're not talking about a ton of time. Each month, you're not the one performing the bookkeeping. So when you can come in and look at it as CEO, talking 30 minutes a week, uh looking at the dashboard, and then maybe another 60 minutes a month where you're just looking at the information, deciding what's working and what's not working.

Income Statement Versus Balance Sheet

SPEAKER_01 12:15

Okay. So you mentioned a couple of reports earlier that you look at the income statement, the balance sheet. Tell us a little bit about what is the importance of each of those different reports and what the studio owner should be looking for in those reports.

SPEAKER_00 12:29

Yeah. So the income statement is telling you what is happening in your business. And this is probably the most important or most popular report, not important, most popular report. This is revenue coming in. So what is all the cash coming into your business? Um, and then we subtract out every all the costs that go out of your business. Okay. So this is everything to operate the facility, to pay your people, to have outside consultants, um, to advertise and market your business. That is that is keeping track of all of those dollars. Here's what people forget. And our clients say to us all the time, you guys, you're telling me that I'm profitable and I have like zero cash. Right. Like, where is all my money going? Where's my money going? Yes. Yes. Okay, this is where the balance sheet comes in. The balance sheet is going to show you where your cash is going. Because in this industry, we have a few, uh, a few specific places where cash will go that's not showing up in the income statement. Big equipment purchases or leasehold improvements. So if you're making any improvements to your facility, if you're buying any new equipment, those things are gonna be on your balance sheet. So it's not affecting your profit, but it's affecting your cash. The other big area is paying down debt. There's nothing wrong with debt. Like I want to be clear, it is 100% okay to take on debt at times in your business to fund the growth of your business. The problem is that when we do not have enough profit in our business to pay back down our debt. So our cash hides in the debt payments because those are not going to show up on our income statement. Um, the kind of um the biggest area uh for business owners that we see that, you know, the dollars don't affect the profit, but they affect your cash is personal expenses, owners' draws, and tax payments. So those are all hiding on the equity section of your balance sheet. So as an LLC, every time you go take out a draw, you are going to what I call the cash ATM of your bank account. You are just taking out cash. If you are not on payroll, if you're not in S-Corp, those dollars will not show up on your income statement. Those only show up as a cash withdrawal. Um, you know, a lot of uh clients that we see, you know, they'll accidentally commingle a few personal expenses, they'll make the tax payment out of their business bank account. Nothing wrong, seriously wrong with it, except for it clouds the cash of your business. Right.

Why Busy Studios Still Feel Broke

SPEAKER_01 15:07

You have to be able, you have to know what those differ those differences are, right? You need to be able to distinguish those out so you can see. Yeah. Okay. So tell us a little bit about this illusion that often happens. And it's an, you know, you kind of touched on it a little bit there with the different reports and where things show up. You know, this illusion of the business is doing fine or good, but but I'm not sure that we really are. So what is often happening when perhaps the studio is busy, when, you know, we're seeing like maybe even revenue increase, sales increase, but like there's not a lot left over at the end of the day. What are the what what is often happening under the hood there?

SPEAKER_00 15:48

Um, I'm gonna talk about the emotional piece that's happening and then the tactical piece that's happening. Right. Emotionally, what we see happening uh is our clients will come on the financial review calls and they'll say, gosh, I'm just just don't feel that busy. Like I just don't feel like we're busy right now. Um, and then we'll pull up the financial statements and we're saying, okay, let's look at the data. Let's see if the data is telling us like, does it match our gut feeling and how we're feeling? More times than not, the the data doesn't actually match that feeling. What I think happens is that as an entrepreneur, there's like a lot of chaos and uncertainty that happens. And what happens is we get used to the chaos. Business grows, chaos is created. There's a lot of uncertainty and emotion. We get used to it. Okay. And then it happens again. We grow again, there's more chaos, more uncertainty, more team members, more of everything. And then we get used to the chaos again. And that's a good thing, right? We're growing, it's a good thing. However, um, our business finances are going to show us the data point to how we're feeling. So I just want to be clear. If you do not have accurate financial statements that you are looking at at the end of every single month, I would just start there because we don't know if you're busy or not. Right. Right. Yes, yes. Um, so it's the emotional piece, right? Like that's the emotional side. I want everyone to be able to make data-driven decisions. That's the whole reason we do everything that we do at Kickstart Accounting, is we want every single business owner, regardless of the size of the business, to be able to make strategic business decisions based on data. Um, so we have to have accurate numbers. Okay, so now you get your accurate numbers from your money team. You're looking at them. Like, okay, this doesn't seem to make sense. That revenue coming in, and I don't have cash. The other um issues and trends that we see is that as a business grows, we have to add on additional layers, outside services, administrative assistance, managers, downtime. Um, we're hiring a team. And this is actually a very expensive industry to be in. You have, I just want to acknowledge that for you. Okay. This is a very expensive industry. You have facility and payroll costs. So think about it. An online business, they don't have the facility costs that you do. So you have to manage both facility, payroll, and paying your admin staff, including your, including yourself. So it's expensive. Um, so as our business grows, understanding that a bigger business doesn't mean more profit. Our expenses are gonna grow alongside of it. And so the expenses do we that we have today, are they supporting the business that we are living in in this moment, or is it supporting the next level of growth? Because often we have to hire ahead. We have to say, all right, I need these three people because I'm I'm gonna go advertise and market and I need these people here so that I can grow. And so understanding that high expenses, it's not shame, you know, it be a good thing if you are saying, I am preparing for a season of of growth and in in my in my business. Um and the other places that we see are the cash drain is if you took a lot of debt out in your business, you're busy buying equipment, um, or you're getting yourself paid and you haven't become an S-corp yet. And so those dollars aren't showing up on your income statement.

SPEAKER_01 19:25

Right, right, right. Yeah, I often see as folks grow, you know, they get, you know, and they they have a lot of members and they're seeing their classes get bigger and they're adding more classes and they're adding more teachers, and payroll is getting bigger and leases are getting bigger. And, you know, it's sort of it's it's interesting to see how, you know, it's not always this sort of linear everything kind of grows together situation. And so having the conversation, thinking about, okay, well, what does the next level of growth look like? What what investment do I need to make today? And and what is what does that look like in terms of how quickly I can kind of recoup some of that return on what I might be investing in terms of a larger space, for example, or additional equipment, right? Um, how do you think about that in terms of what from when you work with your clients?

SPEAKER_00 20:13

Um, I like to think of business and seasons. Um I think we think that business is linear and that we're all always in a growth season. Right. It's starting.

unknown 20:24

Yes.

SPEAKER_00 20:25

And I want to be clear, we're not, right? Like we cannot maintain that type of trajectory for all time. And so I encourage everyone to think of what season of business am I in today? And then how does my spending compare to that season of business? Um, so I like to think of healthy spending. Like we all have to spend money in business and we need to have a healthy amount of spending. And so if I'm operating a growth season in my business, I'm gonna have eight to 10% of my sales going back out in advertising and marketing. And that's needed, right? Like that's important part of this growth season. Um, I'm gonna have facility costs. And so if I have um, if I'm in the right space that fits the business I am today, then those facility costs should be around eight to 10% of your sales. Let's say you you leased a space that's going to be able to long term facilitate the growth of your business. So you're not filling the capacity dial, but you will, like in two years. You might be operating at 15% of your sales going to facility. So it's important that we dial back in other areas. But a healthy spending in this in this industry is about eight to 10% of our sales and and facility costs. We have to have a team. So allowing 45% of our sales to go back out in and supporting our team, we need outside services. So around 6% of our sales, um, having bookkeeper, uh, legal uh experience. Accountant, VA, those operations, marketing support. So we have to have that healthy amount of spending in our business. And I think the best thing that we can do as business owners is to say, this is the season that I'm in. And I'm going to release the shame around my around my spending and know that that's ultimately the goal is to run a healthy, sustainable, profitable business.

SPEAKER_01 22:25

Absolutely. So tell me a little bit about what healthy growth looks like first in terms of um one that's growing and what it includes. And then I want to talk a little bit about perhaps some of those red flags that we mentioned earlier on.

SPEAKER_00 22:40

Yeah. So healthy growth, I want to be clear. I don't want to put out any numbers for anybody because I don't want you being able to shame yourself. Healthy growth is what is important for you and your business. So when we work with our CFO clients, one of the things that we do is we look at our tenure North Star. Like, where do we want this business to be in 10 years? Where do I want to be personally? Then we pull back to three years and say, okay, where does this business and where do I need to be personally in three years? Now that I know where my North Star is, I can start to look at my one year plan, that budget to say, here's how I'm gonna get from where I am today and start making progress towards my North Star. And then having the key performance indicators to help me get there. So your North Star is not gonna look like my North Star. And I want to acknowledge that. However, um I'll I'll I'll give you a uh a worksheet for everyone to be able to download. Um, if you go to kickstartaccountinginc.com slash healthy, um, you can download the whole worksheet so that you can compare your income statement compared to each of those categories. So if you are in a season of growth, you can uh adjust your spending categories. But I always want you to focus on 15% profit. That is the amount of profit that we need to continuously fund our growth and to have a healthy and sustainable business. If we're losing money month over month or year over year, we need to make those tweaks so that we're spending the right amount that will allow our business to profit.

SPEAKER_01 24:20

Yeah, absolutely. Quick question, because this comes up a lot, which is where does the sort of the, you know, as a as a founder and a business owner, you kind of deciding your own compensation, right? Your own drawer based on the data for sure that you have, your financials and and how well a business is doing. So how do you sort of account for that when you're thinking about your owner draw versus the profit margin?

Owner Pay And The S Corp Shift

SPEAKER_00 24:49

Yeah. So as an owner, you're going up to that cash ATM of your business. And so when you're thinking about how much you're going to pay yourself as an LLC, you can pay yourself as much as your business can afford. So I generally we tell our clients to look at your average profit by month throughout the year and to start to work towards becoming an S Corp. So that means you're taking out a percentage of the profit each month via owner's draws. Um, becoming an S-corp is this amazing tax strategy that we have available to us. Um, so when you become an S-Corp, um, you'll you'll become part of the operating expenses of your business. You'll pay less than self-employment tax, um, and you will have a lower net income, which is actually kind of a mind, a mind game request. So I go, oh, uh, okay, my profit's lower, but yeah, we're paying you through payroll now. So you're on payroll for as a business owner, paying yourself. You are lowering the net income of your business. But when you become an S Corp, you have to pay yourself a reasonable compensation. So you have to pay yourself. The IRS says, stop Danielle's role. The IRS says you have to pay yourself a reasonable compensation. Um, this is really important because as an LLC, I want us all practicing um how to pay ourselves. So it's it's time to become an S-corp when you can regularly take draws from your business. You have completely stopped commingling business and personal and you have$75,000 a year in net income for more than two years. It's time to become an S-corp. But it's like going on a diet on Monday. Like if you if you haven't been paying yourself, you're not gonna be able to once you become an S-corp. So uh does that answer your question? Yeah, that helps a lot. Yeah, absolutely.

SPEAKER_01 26:40

Okay. So let's talk, let's go back a little bit to um talking a little bit about what are some of the red flags that you see when it comes to numbers that that come up more often than you'd like.

SPEAKER_00 26:55

Yeah. I think the first red flag is if you have not reviewed your numbers in the last 90 days, like that's red flag number one. I still, I'm still surprised at how many business owners will go an entire year operating their business from their checking account, like just looking at their cash balance, not understanding their profit. They get to tax season, they have no idea how much they owe in taxes, and they're not ready for it. And I want every single person listening to look at their numbers every single month. Your tax return, like it's a non-event because you've already been preparing for it all year long. So that's the biggest red flag is just actually taking the time to have accurate financials and then taking the time to read them.

SPEAKER_01 27:45

Yeah, definitely. Um, what are some of the other things that stand out to you when you start working with folks who perhaps have never had someone else look at their books before?

SPEAKER_00 27:54

Uh, I'll talk about AI for just a second. Yeah, please. I'll go in a little soapbox. Okay. I'm I'm I feel really passionate about this topic right now. And I want to be clear, I'm an active AI user. So daily user, love it. There's a huge place for it in our lives. However, what I'm seeing um right now, especially clients who who are coming in through onboarding, um, they have created different syncing processes with QuickBooks. So point of sale system, now sinks with QuickBooks. They're like, oh yeah, it's gonna be so easy now. Um, we had a client recently who came through onboarding. She was so proud of her bookkeeping. She's like, I think I'm doing a pretty good job. I just know I need to get this off my plate. Those are always the hardest for us because we have to tell them that they didn't do a great job. So she had everything double thinking. And then what she was doing was she was taking her inaccurate bookkeeping. So to be clear, QuickBooks isn't like ding ding ding, that's wrong. Don't put it there. Like it's not rack and sale, right? Like QuickBooks is sending you no alerts. Then this client was taking her incorrect financials, uploading them into ChatGPT and saying, act as my financial advisor, as act as my CFO. Chat GPT wants to please you.

SPEAKER_01 29:08

Oh my god, it's so bad. It is such a people pleaser.

SPEAKER_00 29:11

It's so bad. Like oh my God.

SPEAKER_01 29:13

So it probably said, Oh, you're doing so great.

SPEAKER_00 29:15

Yes. Oh, yes, giving her all these props and talking to her. And and she had no idea that the bookkeeping was wrong. She had no idea what she was feeding into ChatGPT, and then ChatGPT was clapping for her, you know. Okay, so that's a red flag number two, is we underestimate the value of having people and a money team because we have to understand is what I'm looking at accurate. And am I creating syncing and systems and relying on those without having an understanding of what's right and what's wrong? So I like to share that as a red flag.

SPEAKER_01 29:54

The context that an expert who is living it and seeing it and has seen it across other businesses and elsewhere is so much more powerful. I think we're so we are defaulting into the AI world of just being like, oh, I just asked Chat GPT what to do, and it said to do this. Like, did you it was of course it's gonna agree with you? You know, it's a it is a it is a scary world because we also like like having that kind of feedback, right? So like we're not gonna say, oh, that's wrong, you know. No, ChatGPT is like, great job, Didn't you? I'm like, yeah, great job. Yeah, great idea, great idea. Discount 99%. Great idea. Okay. Yeah. No, it's it's scary, right? Um scary, and it's and it's um it's really helpful to have people that have that context like you be able to say, actually, this is the best practices, this is what works, this is what you need to watch for. These are your targets, these are your goals, this is what makes sense for sure. Yeah.

SPEAKER_00 30:52

Um, I want to share a few other balance sheet red flags. I just um I recorded a podcast recently on um the four red flags hiding in our balance sheet. So this feels um uh very front and center for me. Um because our balance sheet is not something that we look at often. Um, it's kind of is that hidden, less popular, like we don't understand it. And so some of the things that hide on our balance sheet is our slow our debt, right? Like think about your credit card debt, the line of credit that you have, the debt payments that you've taken out. Um if we're not watching that closely, it can be easy to allow those debt, those debt facilities to accumulate slowly over time. It's not something that feels like it's a hard, like I didn't go out and take out$100,000 today, but slowly over time, they creep up. And what I see happening with our clients is that the business might have enough profit generating month over month to keep the business afloat. Like the business might be breaking even. Um, there might be enough profit to actually operate the business. But is there enough profit to actually pay down the debt that's on on the on the balance sheet? Um, so that's a scary one for me that I just think that there's a lot of responsibility for us as business owners to make sure that we're looking at that balance sheet every single month.

SPEAKER_01 32:17

Yeah, a hundred percent. And we don't want to end up in a tricky spot with that. And I do think that is something that is overlooked enormously for sure. For sure. All right. And so if someone, I mean, I so there's a lot. I mean, we I could keep talking to you about this for for a long time, many, many, many hours. Um, and uh and it's and it's pulling me back into remembering how it felt when I took accounting and finance 101 at the London School of Economics, and I was like, oh gosh, I don't like this at all. So I'm so glad that you like this.

SPEAKER_00 32:48

I do, I love it.

SPEAKER_01 32:52

Um, so it's bringing it's it's it's it's all awakening that part of my brain a little bit. But yeah, so when when when studio owners and business owners, you know, are working with a bookkeeper, um, you know, we we've seen it. I've seen it firsthand that again, it's not about necessarily be swimming in spreadsheets, but being able to look at data and say, okay, this is where I need to be or this is what I need to be focused on, and also how to interpret it and and and enable and and facilitate perhaps some change in strategy or decision making in the business. It really allows you to make smarter, more sophisticated decisions. You're better, much more equipped with the right information. Um and and we I see it over and over again with the studio owners that I work with when they have that knowledge at their fingertips, there is a lot less gut uh that they're relying on, but also they're just more confident business owners. And it looks like just knowing, right? Knowing and having this idea and being like, okay, let me just check the numbers make sense, or I know because I've seen the numbers that I can do that or I can't do that. It's not a guess, which is I think leads more into that sort of like wondering and questioning and puts you in a place of like real sort of like, oh, I'm not sure, procrastination. Alternatively, you know, when you know your numbers, you have the ability to make decisions quickly and more confidently. And I think it's such an important place for us all, especially women business owners, to be in. Absolutely sure. So tell me a little bit about if someone's listening, sort of realizes that maybe they're not quite as informed about numbers as they'd like to be, where should they start without getting overwhelmed? And perhaps where can they perhaps learn a bit more about what you do and what they should expect from you or any other bookkeeper?

Balance Sheet Debt Creep Warning

SPEAKER_00 34:36

If you go to kickstartercountinginc.com, um, we have our blog and podcast. So um I think I've been running the podcast for almost four years. So there is almost 300 episodes on this topic. So um you can start small, 10 minute episodes uh and ship away to gain your to gain some understanding. So kickstartertaccountinginc.com, um, you'll find the podcast there. Um, I want every business owner, regardless of the size of your business, to have a money team. Um, so we start working with with business owners as um as early as$100,000 a year in in revenue. And then um we grow with our clients. And I say that because I want everyone to understand it's not about just having a tax account. Our tax account can't actually do their job unless we have the bookkeeper role first. So I think that's the most overlooked person on our team. Um, I like to think of it as what we do is um our clients dump a, you know, like those thousand piece puzzles, dump it on the on a coffee table for us. And what we do is we strategically put together that entire puzzle. And all our clients have to do is to come in and look at the finished puzzle. They don't have to look at all those, those pieces. Um, all they have to do is look at the CEO dashboard, look at that snapshot. The from there, those accurate financials, they could be used to file the tax return because that is all your tax accountant is qualified to do is to file that return. It allows you to meet with your financial advisor and take advantage of those strategies. It allows you to create a budget and look to the future of your business. And so I just want everyone to have permission. You do not have to do this alone. We're not meant to do business alone.

Where To Start And Next Steps

SPEAKER_01 36:23

That's absolutely right. Absolutely right. Well, thank you so much, Danielle. This has been such a valuable conversation. So much here to think about. I think one of the biggest takeaways is number, well, let me two, I think. Number one is um, you you're not supposed to do all of this, right? This is not, this was, this is not, this is, this is not what you're supposed to be doing, you know, and having that financial clarity is not about you then going to become an accountant in order to figure it out, right? Your role as a business leader and the CEO of your business is to, is to find a someone else to take on the task of putting together your numbers and who can also perhaps give some insight into what those numbers mean, right? Um, and so when we know that when you have that in your business, you become a much better decision maker. When you understand your numbers, you you can price better, more confidently, you hire more strategically, you and you grow a lot more sustainably. And I think that you also grow from a place of confidence and not from a place of chaos or anxiety. So I would encourage you all to go to kickstartaccounting.inc to learn more about Danielle and her team. And I want to thank you so much for joining us today. Yeah, thank you so much for having me here. Thank you. And so if this episode was helpful to you all listening, I would love it if you could share it with another studio owner who might like to hear it too. Uh, because the more studio owners who truly understand their numbers, the stronger our entire industry becomes. Thank you so much for listening, and I will see you next week. Did you love this episode and want more? Head to spring3.com and check out my free resources that will help you run a profitable and fulfilling studio business. And before you go, one last reminder. There is no one way to do what you do, only your way. So, whatever it is that you want to do, create, or offer, you've got this. Thanks again for joining me today and have a wonderful rest of your day.