121. Why Busy Entrepreneurs Stay Broke (And How to Break the Cycle)

What happens when revenue goes up but wealth doesn't?

Most entrepreneurs operate with what Jenn calls "leftover thinking"—paying expenses first and hoping there's something left over for profit. Spoiler: there never is. Expenses expand to consume whatever's available, and you end up working harder than ever with nothing to show for it.

In this episode, Jenn breaks down why revenue is vanity and profit is sanity, and walks you through the mindset shift that changes everything: treating profit as the first thing you fund, not the last.

In this episode, you'll learn:

• Why making more money doesn't automatically mean keeping more money
• The "leftover thinking" trap that keeps entrepreneurs financially stressed
• How to flip the script and pay yourself first (without letting bills pile up)
• Why your money needs a system just like your operations do
• A simple financial rhythm that takes the stress out of money management
• The difference between building a business and building actual wealth
• One exercise to see exactly where your money is really going

This episode is for you if:

• You've had a great revenue year but your savings don't reflect it
• You feel like money flows through your business without sticking
• You avoid looking at your numbers because it feels overwhelming
• You want to build real wealth, not just stay busy
• You're ready to get intentional about where your money goes

Key quote from this episode:

"You didn't build this business just to watch money flow through it. You built it to create a better life. Make sure your money has a system that actually delivers that."

Thanks for listening! 

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Transcript

Naming The Money Problem

Revenue Vanity Vs Profit Sanity

Why Leftovers Never Become Profit

Make Profit The First Allocation

Constraining Expenses On Purpose

Simple System, Not Easy Habits

Build A Financial Rhythm

Weekly, Monthly, Quarterly Reviews

SPEAKER_00 0:16

Hey everyone, welcome back. I'm Jen Cody. I am the host of the Create Your Day podcast. Today I want to have a conversation with you that I feel like a lot of people seem to avoid. Certainly, a lot of entrepreneurs that I speak to avoid it. And it's about money. I'm gonna be blunt and honest. And a lot of us honestly avoid this even with ourselves. Um, so I want to talk about money today. I want to talk about real money. I want to talk about where it goes, why it seems like it disappears, and why so many of us um notice that there are people out there who it feels like they're making more than ever. Um, but there's less and less to show for it. I have noticed this happening over the past few years. A lot of people that I work with, um, you can have all the systems in the world. You can create systems for everything, you can have really great communication in your company, you can have even figured out how to have those recurring problems not keep happening. Um, maybe you have a great team that works like clockwork, all of those things. But if you don't have a system for your money, you're not really building wealth. You're just working really hard and watching money flow in and flow right through your hands. And we're not to blame for this. This is something that we we work with our money the way we think it's supposed to happen. So, what usually happens is revenue comes in, expenses get paid, teams get paid, um, maybe something has to get reinvested into the business. And then maybe people pay themselves at some point. Whatever's left over, and I mean that, maybe people pay themselves something at some point. And then if there's anything left over, that would be what's considered the profit. But the problem with this is that there's never anything left over. There's always another expense, there's always another investment. The business is always going to need something else because what is happening is that your expenses they just expand and they will consume whatever's available. It is just how it works. If there's money in the account, something is going to find a way to need that money, to spend that money. So you end the year like making more money. How many of you out there right now? We're coming up on tax season, right? So how many of you are looking at your 19? Wow. Oof, 2025, and realizing, wow, I made more money than ever last year. But you look at your bank account and you're like, well, where does all that money? What happened to it? And this is like leftover thinking. We think of profit as what is left over after everything else. But with leftover thinking, profit is always going to be last in line. There's actually a great book out there called Profit First. I will link it in the show notes. And um, I don't necessarily this podcast is not about everything that's in that book, but that book did kind of spark my thinking many years ago about how am I looking at the money that comes in and how can I make sure that profit is actually something that does get prioritized in some way. And if you think about entrepreneurship in general, people tend to speak about revenue much more than they speak about profit. And revenue is just vanity, honestly, right? Revenue is vanity and profit is sanity. Revenue is the number that sounds impressive when you're at a party, you want to speak about your business. That's what you're sharing with people. How much money did the business make last year? You know, oh, I have a$2 million business, I have a half a million dollar business, my business doubled their revenue last year. Those are the conversations that people hear in entrepreneurial groups. But profit is the number that actually matters both for your business and for your life. I work with lots of people who are making$500,000, a million, two million. The companies are making a lot of money, but there's nothing in that savings account. And then I've worked with entrepreneurs who the business is making$150,000 a year, but their savings account is getting deposits every single week. And they are building real wealth. So the difference has nothing to do with the money that is coming in. It's what happens to that money once it arrives in your business. We can have businesses that look wildly successful on the outside, right? And still be stressed about money. I mean, I know because I do this for a living, I work with people that are in multi-million dollar industries and they are still stressed at night, tossing and turning. Um, because you can be working constantly and bringing in more money than you ever imagined and somehow feel just as financially precarious as you did when you first started and there was no money. So if this does sound familiar to you, I don't want you to be sitting there thinking that you're one of those people that are bad with money. That's another story we tell ourselves. It's not about being bad with money or good with money. It's just about having a system for your money, right? So if you run your operations um the same way all the time and never get intentional about it, where you're reactive, you're, you know, everything is haphazard and you hope it all works out, it doesn't work, right? And those that's how we approach our systems with finances also. Same way we approach operations. We just react to it. So it's not something that is wrong with you, it's just something that we need to shift. So what I want to propose to you is that today you're going to stop treating your profit as what's left over. And you're going to start treating your profit as the first thing you fund. And I know you're already shaking your head at me that you can't do it, but let's just keep going. And I want you to hear me out. Because when revenue comes in, before you pay your expenses, before you pay anyone on your team, before you reinvest, I want you to take some profit first. So, like I said, I know that you are already telling yourself that this can't be done. You have bills to pay, you have expenses that have to be covered, and you absolutely do. I trust you that you are telling the truth. But there's another side to that truth. When the profit comes last, your expenses are always going to expand to use all the money. When the profit comes first, your expenses will learn to operate within what is left. You are forcing function. I want you to think about this for a second. If you have a business where your revenue fluctuates, right, month to month. Maybe this month your business brought in$30,000. Next month it might be$50,000, right? Like there are a lot of businesses out there where it fluctuates. Your expenses don't really change. So you learn how to pay your expenses at$30,000 a month the same way you learn how to pay your expenses at$50,000 a month. So we are going to force that function. It makes you more intentional about your spending. It just shifts that mindset to where, you know, when you have those months fluctuating$30,000,$50,000, when you have the$30,000 month, you don't spend any time wondering why you don't have the money to pay the expenses that you wish you can pay. You just make it work. So you need to have that same mindset around profit because I want you to be able to find the efficiencies you never would have found and in the$50,000 month, if that makes sense. So that's the mindset ship mindset shift we're going to take. And really what's most important here is that this is going to ensure that you, because who are you? You're the person that built this, you're the person taking all the risk, you're the person working all the hours. I want you to benefit from the success of what you are building. And this is the only way for you to actually benefit from this. So just like operations need systems, money needs systems. If you do not have a predetermined place to put every dollar, the dollars are going to go wherever you're screaming the loudest, right? Where does it feel most urgent? Wherever asks for the money first is going to get it. So if you have a bill that's been looming over your head, you're watching that bank account to see when is the next$1,000 coming so that you can pay down that bill, right? I know this. I've had the conversations with you. So what if$100 of that$1,000 had to go somewhere else first? Guess what? You would take the$900 and you would pay the bill with it. You would make sure that wherever is asking first gets the money first. When you have a system, when you've decided in advance that X amount, X percent is going to go to profit, Y percent is going to go to your pay, Z% is your taxes that you have to pay, whatever's left goes to your operating account. Then the money knows where to go. Decisions become much simpler, and discipline actually gets easier when you implement a system like this. It's really very, very simple. When the revenue comes in, you just immediately allocate it. So a lot of us out there have revenue that comes in sometimes every day, right? Especially if you have some a brick and mortar or retail business, like your revenue is different every single day and is being deposited, most likely, every morning from the previous day's sales. So maybe it's something you need to set up every day, maybe it's something you need to set up every week, every month, depending on how your revenue flows into your business. So this becomes very personal, right? You have to figure out what works for you. But once that money does flow in, I want you to physically move money to different places that have different purposes. So there's a profit place, there's a tax place, there's your pay as the owner, there's your team's pay, there's an operating account. All of those things need to exist so that when expenses do need to be paid, you look at your operating account. You don't look at your total revenue. I'm I you're stumped there, right? You look at your operating account and not your total revenue. That's what you have to work with. That is the constraint your business operates within. And if it is not, it has to start. I know I'm it may sound like I'm oversimplifying this, but it truly is simple. And we get caught up there because we think simple means easy, and it does not mean easy. It requires discipline to set up and consistency to maintain. And that's why most people don't do it. It is super simple, but it is not easy. It requires discipline and consistency. And I really want to acknowledge something else here. Money is freaking emotional, right? There are a lot of emotions tied up in our money. How we relate to our money is tied up in our sense of self-worth, in our security, in our childhood experiences, our fears, our hopes, our dreams. Looking at money clearly and making intentional decisions brings up a lot of shit, brings up a lot of stuff. So a lot of people avoid looking at their numbers. And it's not because they don't have time, but it's because it's scary. What if I am not as successful as I thought I was? What if I'm doing something wrong? What if I see something I don't want to see? And here's something that I really know for sure. Avoiding reality does not change reality. I can promise you that because I spent a lot of time avoiding reality. And all it means is that you're delaying being surprised by this reality later. And who knows what later means, right? The stakes may be higher, your options may be fewer. So I need you to look at your money, really look at your money regularly and don't bring the judgment with you. Try and leave the emotion out of it. This is one of the most powerful things you can do because when you know when you stand, where you when you know where you stand, you can make informed decisions. But when you're in the dark, you're just guessing. You have no idea what's going on. So I have spoken about communication in the past. Um, that we want to have predictable communication. We want moments of connection in our life, and that reduces chaos in our business. This same principle is going to apply to our money. We need to have a financial rhythm. We need to have predictable moments where we look at the numbers, we make those decisions on what is going where, how are we moving things around, and ensure that everything is tracking. So I'm going to walk you through what that may look like for you. And the same way you're going to set up your system for maybe you need to do this daily, weekly, monthly, we spoke about that, right? What we're going to go over now, I'm going to give you different examples. So, weekly, what I want you to do is that quick check-in. What came in? What went out? Were there any surprises? Make sure you make your allocations. If you struggle with discipline and you have a business that gets deposits every morning, I want you to do this every day. Just for a little while. Eventually you will be disciplined enough that you can let those deposits build over the week and then just do this part once a week without worrying about it. But if you don't do this and get disciplined with it, what's going to happen is that when you do this quick 10-minute check-in, it turns into a two-hour check-in because you're chasing money that has been eaten up by things because you didn't take the time to move it where it needs to move. And then what happens? After that gets done weekly, we're going to go to a deeper um review. So if you're starting off looking daily, then maybe your deeper review happens weekly. If you're starting off looking at the quick check-in weekly, the monthly review can be, I'm sorry, the deeper review can be monthly. So this is where you're going to see how did this month actually perform versus the expectations that you had for the month? Are the allocations that you have working? Do you have to adjust anything? Did you pay yourself? Do you need to move profit to a different account to a say, you know, um a larger savings account? Not a larger savings account. What's the word I'm looking for? Um, you know, if you're built slowly building profit, it does make sense to move it into like a high yield savings account where it can just sit. This comes with practice. This comes with um learning how much profit feels good to your nervous system. And then I want you to think about what are you going to do quarterly? That's more big picture. So we have annual goals for our business, right? Are you tracking towards those annual goals? What is your profit looking like on a quarterly basis? What about your taxes? Do you need to set more money aside? Um, have you already set aside enough? What about your own pay? Do you want to make adjustments to the pay that you're taking home as the owner? And then every year, which is where a lot of you are right now, we are in full-blown corporate tax season. So this is where we're doing that full review. We're planning what worked this past year, what didn't work, what are the targets for this coming year? What do we have to change from what we did in the past? This rhythm is what turns your money from something that happens to you into something that you actively participate in, you're actively managing. So it becomes um, it's no longer something mysterious and stressful. It's actually clear and can almost be empowering to you. So as you think about taking control of your money in the way that we're doing right now, I want you to ask yourself a question. And it's about your business, right? I know that you're building a business. And are you building wealth? Because those are not the same things. You can have a thriving business that generates lots of revenue and keeps you super busy. Most of you are living that reality right now, and maybe there's still nothing in the bank. There's no safety net, there's no freedom to your life. I want you to think back to the point of creating your business. Why did you build the business that you're building? At least for most of us, it is to create a better life, a life that has more security, more options, more freedom, more money. I mean, at the end of the day, that is what gives us a lot of the freedoms that we are looking for. But if your money is just flowing through the business without any of it sticking, you haven't created any of that. You're actually just creating a really super demanding job that you can never quit because you have nothing saved. So when you think about wealth, real wealth is not just revenue, it's assets, it's savings, it's investments, it's money that works for you even when you're not working. It's that cushion that lets you take some risks. Whether the tricky parts, the downturns, it lets you say no to things that you don't want to say yes to. And it lets you step back if you want to, without feeling guilty and without feeling like you're going to have three times as much work when you do come back. None of that that I just explained when it comes to wealth versus money and revenue, um, none of that happens by accident. It only happens by system. So I'm going to give you some homework to do this week. And I want you to start by taking a look at the last three months of your income, your business income, right? I want you to total it up. And then I want you to look at what actually ended up in your pocket, not went to expenses, not reinvested, not paid taxes. What did you actually keep for yourself? What is the money that you were able to actually spend on your life? Like go out to dinner, all your Amazon packages that come to the house, saving for your future. Use however you want, but how much of it actually wound up there? And I want you to look at what percentage that is. There's no judgment here. I just want you to see it. That's it. Awareness is the first step of everything. So that's the only thing I want you to do here. Just see it, don't judge it. And then I want you to ask yourself, is this the number I want it to be? Am I building wealth or am I just moving money around like this giant chess game? Because if you don't like what you see, I actually have good news for you. You have the power to change it. And I know it can't be changed overnight, but it can be changed systematically. The same way that you would build any other system in your business, you can build the system for this. Remember when you're doing this, revenue is vanity and profit is sanity. Vanity is what we want to talk about at the party, right? I want I would love to be able to go to dinner with a bunch of amazing entrepreneurs and talk about, you know, the fact that my revenue doubled, tripled, quadrupled over the past five years. And guess what? It has. But does that mean anything about the profit that I that I have been able to keep for myself, keep for my family, invest in my future? No. The the rate of my revenue growing has nothing to do with the rate of my profit growing. And that is a really key distinction. I want you guys to understand that because your revenue can stay stagnant. You know, like if you have X capacity for maybe you do one-on-one clients or something, and you can never have more than this many clients. So until you raise your prices, your revenue is going to stay pretty standard. So, how do you increase your profit? You have to get better at allocating your money. And what is the system that's going to help you do that? You didn't build the business that you built just to watch the money literally flow through it like a waterfall. You built it to create a better life for yourself. You built it to help the people that you love. So we want to make sure that your money has a system that's actually going to deliver that future to you. I promise you, all the operational excellence in the world does not matter at all if you're not building actual financial security along the way. And I want your business to make you wealthy, not busy. Or not just busy. It's going to make you busy. Sorry, there's nothing I could do about that. But I want it to also make you wealthy. So I hope that this information was valuable to you. I want you to go out there, create your Day in the best way possible, create your future in the best way possible, and these are the systems that are going to help you get there. Okay, so until next time, thank you so much for being here. Take care of yourselves, take care of each other, and I will see you next week. Have a great one.