how to not screw up your finances with a simple weekly meeting

Summary

how would you rate yourself on personal and business finance. whiz, or someone who avoids it because it stresses you out. I’m the CFO for multiple companies, mostly because I’m a disciplined numbers person and that’s rare among entrepreneurs. and I run all of it on a simple weekly meeting that takes 30 minutes.

1. step zero. if your finances stress you out, go straight into the storm. find out the truth. even bad news is better than unknowns. you’ll walk out of the first real look at the numbers way less stressed than you walked in. for most entrepreneurs the meeting is weekly. once you’ve turned pro, you can probably stretch to monthly.

2. set monday as the meeting. configure your payment processors to deposit to your business checking on monday morning. that single deposit number is the starting point of the meeting. it’s also a clean read of how well the business did, how many customers you served, how much impact you made.

3. step one, pay. every business expense goes on a single business credit card. the credit card gets paid off to zero every monday. not 50%, not 75%, 100%. you don’t play the debt game with a high interest credit card. then pay the team. then pay yourself the smallest justifiable salary you can live on. the upside comes later, in profit.

4. step two, taxes. take 15 to 20% of the top line revenue and move it into the business savings account. two accounts, business checking and business savings. savings is for taxes only. do this every monday and you will never again be terrified of what the IRS is going to say in April.

5. step three, what’s left is profit. two places it can go. distribute it to yourself as owner pay, or reinvest in growth, ads, an event, a coach, a mastermind. split it 50/50 if you want. just make the decision deliberately, not by leaving it to drift in the account. that’s the entire meeting. 30 minutes. try harder.

Transcript

go straight into the storm

The most impactful business is the business that genuinely improves another human, a better human business. And to grow a business like this, you have to continually improve yourself. This podcast is a documentation of that thesis, scaling businesses and also personal growth. My goal is for you to shortcut this journey.

So if you’re ready to try hard, subscribe. If you like what you’re hearing, please share and enjoy. How would you rate yourself on your personal and business finance? Are you a whiz or are you a person who kind of shies away from having to deal with it because really it stresses you out and you’d rather not think about it?

What’s up guys? This is Jerred Moon and welcome to the Better Human Business Podcast. I just finished wrapping up a live podcast I did with one of my business partners, Danny Mate. And we did this podcast, hour-long podcast, all about finance, running a financial meeting. I’m going to give a quick synopsis about running your finances, but first a little bit of background.

I am technically the chief financial officer for multiple different companies. I don’t know how it happened, but it happened. And as an entrepreneur, you do wear multiple hats at times and that is one that I still very much am in multiple different companies. I run the finances. And I think it’s just because I’m a numbers guy, I’m very disciplined, and that’s not a lot of entrepreneurs.

And since I have that skill set, it just fits really well in running all these companies. It’s something, to be honest, I take for granted. I don’t really think about being the CFO much because I don’t actually spend that much time on it, which might blow your minds. But the reason I don’t spend that much time on it in any of my companies is because I have a very simple financial process that has taken me years and years to unpack and get right, but it allows me to have very little stress in my finances, both personally and in business, but also allows me to do all the things that need to be done in a very short amount of time and move on so I can focus on the bigger tasks.

start with monday’s deposits

So I’m going to talk about what that financial meeting looks like today. But I do want to urge anyone, if your finances are stressing you out, you need to just go straight into the storm. You need to just figure it out. You will be so much less stressed after you have the answers as to what is going on in your personal finance and business finance.

Even if it’s bad news, I would rather know the bad news than have a bunch of unknowns about whether or not I was running a profitable company or whether or not I’m spending too much in my personal life. This is how simple it truly is. I recommend for most entrepreneurs having a weekly financial meeting, once a week.

If you turn pro, maybe you can go monthly, but for most everyone I’m going to say weekly. And this is a financial meeting you’re just doing with yourself, okay? It’s once a week. It can be Monday. You schedule 30 minutes for this, an hour, whatever it is. And this is exactly how I do it. The financial meeting starts with whatever was deposited in the account on that Monday.

Typically if you have a payment processor, you can set this up. I have it to where our payment processors, even though we have multiple, they all deposit the money into our business checking account Monday morning. That way I can do the meeting on Mondays. I don’t have to have seven different deposits.

Some will do it daily. Some will do it monthly. You can typically set up this frequency with your payment processor. So that’s where the financial meeting starts. It starts with this number, right? So you have this number. It’s what was deposited. It’s how well you did in business. It’s how many customers you served, the impact you made.

step one, pay everything off

Unfortunately, the impact you made has a direct correlation to this number of how much money was put into your account. Now after that, that is the entire basis for the meeting. There are three steps. Step one is you’re going to pay all necessary expenses and operating expenses, payroll, everything.

I’m going to break that down a little bit more. Step one is pay. The first thing I do, I have a business credit card that all my business expenses go on. We pay off that business credit card 100%, not 50%, not 75%, 100%. Every single week, the business credit card gets brought down to zero because I don’t want to play the debt game.

I especially don’t want to play the debt game with a credit card that has a high interest rate. So you pay the credit card off. After the credit card, you make sure everyone gets paid. So whether that’s your team getting paid or even you getting paid. And for you getting paid, this would be like a small justifiable salary that is just enough for you to survive because the real benefit, the real upside to being a business owner is the profit that you can take, but that’s not what I’m talking about.

We’ll get into that in step three. So step one is just paying all the necessary expenses, paying your people, your employees, and paying yourself the smallest amount that you could live on. That’s just like your base salary, if you will. That’s step one. Step two, we’re going to set aside money for taxes.

So this is typically just 15 to 20% of the top line that you made. So this isn’t after expenses or anything. So if you had $5,000 come in this Monday, you would just take 15% of that and you put it into a savings account. And all of my businesses have two accounts. They have a business checking account and they have a business savings account.

step two, set aside taxes

The savings account is really only for taxes. So we put the tax money in there. Now, if you’re doing that one thing, you no longer have to stress out about what the IRS is going to do, what they’re going to charge you or whatever, because typically 15 to 20% of top line revenue is going to be more than enough to cover your tax burden with the IRS.

So that’s step two, set aside your taxes in a savings account. Now the third and final step is you get to look at what is left over. This is your profit because you’ve paid, you’ve even already paid yourself. Technically you pay yourself from profit, but you’ve paid yourself. You’ve paid your team.

You have paid off all operating expenses from the credit card. You’ve paid the IRS. All the people that need to be paid are paid. So now if you have money left over, that’s your profit. Now there are two things that you can do with this money and you really need to think about which one you, which stage of business that you’re in, but you can either distribute 100% of what’s left over to yourself.

That’s a huge upside to being a business owner. You can just be like, Hey, everyone’s been paid. I don’t need this money for anything else. I’m just going to keep it and it can go into your pocket. You can use it, spend it and feel free to do that. You are the business owner, but I don’t think you should always do that because another category that money should be allotted for is growth or reinvesting in the business.

So you might want to spend this on Facebook advertising. If you’re looking to do some online advertising or maybe a marketing event that you’re doing or an event, an actual event that you want to go to and spend on or a mastermind that you want to become a part of or a mentorship, you want to become a part of all of those kinds of things.

step three, decide on profit

All of that is reinvesting into the business. So that those are the two places that you need to think of for putting your profit and you can even split that profit if you want down to 50 but you know what? If I have a X amount left over in profit, 50% of that is going to go into reinvesting in the business and 50% of that is going to go into my pocket since you’re pretty much paying yourself only what’s minimally necessary in step one.

So that is the financial meeting. Like I do other stuff in this meeting like pay bills, review statements occasionally, make any necessary transfers, but that’s the basis of it. As the CFO for multiple companies doing a lot of revenue, I do not overcomplicate it beyond that. It’s a weekly financial meeting.

Those are the three steps. It starts with how much money comes in. We pay everything, pay everyone, set aside money for tax, and then we decide what to do with the profit, whether we want to keep it or whether we want to reinvest. If you can do those things, you will be so much further along than most people are as entrepreneurs and I’ve seen this over and over again.

Entrepreneurs typically suck with money both personally and professionally and you don’t want that to be you. So take the time to do the 30 minute weekly meeting, follow these three steps, and you will be so much further along than anyone else and you will have so much less stress. All right, go get it done.

Try harder.