Episode 57: Receiving Empowered Financial Support with Connie Vanderzanden

Connie Vanderzanden is on a mission to help entrepreneurs live the lifestyles they desire by learning the simple steps, structure, and discipline to create and save money.

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Transcript

Emily: Hello and welcome back to the Em Makes Money Show. I'm so excited to be joined by Connie Vanderznden. She is on a mission to help entrepreneurs live the lifestyle they desire, by learning the simple steps, structure and discipline to create and save money. With 34 years of accounting and bookkeeping experience, a variety of industry knowledge and her own real-life business growth journey since 2001.

Connie developed the going beyond revenue, and cash handling system, focusing on cash flow planning that creates profitable and sustainable businesses. And Connie is an Oregonian born and raised in the Pacific Northwest. She spends time there with her husband of 34 years and their four kids. So Connie, welcome to the show. I'm so happy to have you. 

Connie: Thank you, Emily. I'm excited to be here. This is one of my favorite podcasts. When I was offered the opportunity, I was like, oh yes, let's please, let's chat more with Emily about money beause I just, I love your take on it so.

Emily: Thank you. I'm so glad and I'm really excited for us to have this conversation cause I think we have a similar way of looking at things. And I love the fact that you have an accounting and bookkeeping background and you, at some point, had the awareness to look at your own relationship with money and how that was playing out in your business. Because as you say, so many people think like, well, you're in the financial industry, so you must have it all together with money. And we sort of forget that, like you're also still a human. You also, once were a child, you are also conditioned to feel money as either a scarce resource or as a reward or a punishment all these different things that play out in our adult lives and in our businesses until we look at them and heal them. So I'd love to just open up with you kind of. At what point did you realize, hey, even though I'm in financial services, I really need to look at my own understanding and relationship with money?

Connie: It was when I hit rock bottom. So I hope by sharing my story is that women entrepreneurs find out this concept and this connection, to money before they have to hit a rock bottom. My rock bottom was I had already grown the business. I went from a solopreneur home-based bookkeeping business to hiring a life coach and deciding to expand. I thought I could teach the way I looked at bookkeeping to other bookkeepers and provide, have team members and really get out there and help more business owners. And so I was about five years into my growth. 

I had already or created 50,000 in debt and I hadn't paid myself for those first five years. Maybe I think my W2 at one time was like $1,400. But that really I wasn't contributing at all. And there's a lot of privilege. I wanna say there's a lot of privilege behind that because I did have a partner that was paying our bills at home.

And I know a lot of business owners don't have that option. So, but for me, I was funnelling everything back into the business and I was exhausted after hustling for that long because I started in 2001 and 2007, I almost quit, but that's when the life coach came in and then I was another six years. So I've been going on this for 13 years of hustle and I just couldn't do it anymore. And that's when a little book came into my life. It was called "Profit First" by Mike McKell.

Emily: I'm a Profit First fan as well. 

Connie: And it had all the right words and it was just like light bulb moment. Still not really making the connection, but a light bulb moment of like, intentional use of funds. I teach this to my clients and have for years about saving for taxes. And then those types in that it was like, okay, I can do this. And then I broke every single rule I stole from all my accounts. I didn't put the money in, or I didn't even take the money out when I was supposed to. And then I started to learn, wait, there's an energy of money here. I can see where my relationship is really clouding this judgment. I am a natural spender, this is fun. And so all these things started to come up, but it took the rock bottom moment to like, line in the sand things have to be different. And then that's what the awareness kicked in. And but I will say really understanding the feminine and the masculine of money only happened in like the last five years. 

So it's an interesting journey to learn, wait, money has energy. Money needs to be paid attention to and what my childhood background had an effect on how I was dealing with it. And I had also given my power of my business money to my husband. He didn't know that he was totally not aware of it, but it felt like I was gonna the principal's office every time we would have a money conversation. And so I had to, I had to learn, wait, this is so disempowering, how can I be more empowered over it? So it's been quite the journey. 

Emily: I've resonated with this so much, because I too read Profit First and was like, this is it, this is the thing. And we even hired a profit first accountant to help us get it all set up and execute it and everything and across multiple businesses. And I think often we overcompensate with a lot of masculine structure, because we think that's going to keep us safe with money or that's going to be the savior, right? Well, this profit first system is now gonna save me from my ways, because now I'm gonna have these accounts and I'm gonna have all these rules. And as long as I follow it perfectly, but it's like at the end of the day. If we think money is going to abandon us, or if we don't trust ourselves with money, or if we feel anxiety every time we look at our bank account, no accounting system is gonna fix that. 

Connie: Nope, it doesn't and really, but I do love the bucket system of it. 

Emily: Yes.

Connie: I do, like now I could be going beyond revenue because I still am a profit first professional. Cause I can't tell my story without mentioning the book. So it still is foundationally part of what I teach, but it is more intentionally putting money in there and having a ritual around it to really pay attention to it and celebrate it. And so it brings in more of the feminine aspects of being really appreciative and, and creating a different relationship with money in your business, which you basically are creating a different relationship with yourself of how you're being support it. 

Emily: This is so cool. So I want to hear more about this when you have a bookkeeping client, or I don't know what your whole suite of services is, but if you have a client come to you. How much of the work together is money mindset or energetic work versus the practicalities and the financial structures, which are also clearly very important?

Connie: So we first normally start with some structure pieces. Cause that's usually how they enter my world is that they're concerned about their QuickBooks isn't set up writer. They are not sure how if their bookkeeper's doing the right thing. So normally it does start with some structure and then we get into creating their financial plan, AKA the budget. And that's where we start talking about energetics. 

I start asking them about what is, what, what is your big dream for your business? Why don't we create a financial plan for that? How are you being taken care of? What does your household actually need so that you can stop using the business like a bank? What if you called out what that was? Because I know most entrepreneurs, once we have the black and white of the numbers, we can put it out there and we can see it. So now it's not running around in our heads. Right? So I'm telling them we're gonna put it out on paper. 

So it's not taking up subconscious space and keeping you up at night, we're gonna put the truth out there and that's gonna sit there and then we're going to make another choice around it. And so they'll go out and create entrepreneurs can go out and create and manifest. And if they say they're going to do it, they'll normally will do it. It's just a matter, they need a number and then they need to know what money's job is. Which is the intentional planning and the cash handling system really comes into play there. And so, we don't, it's interesting how we talk about it, but we do talk about it more of like, what's my job. Let's give it a job title. It's put it in its own special account. Let's really lean into that part of it. So it doesn't talk a lot about. The energy flow of it, but it does get in there a little bit, but usually we always start with the masculine.

Emily: Okay. Do you find that a lot of your clients are like an avoidant energy with money? 

Connie: We were taught, I think, well, my first, very first coach was a life coach, but after that, the business coaches I worked with, it was all about top line. All about, if you make six or seven figures, your life will be perfect. So it's more money coming in. They never really asked about what I was doing with money. And if you are a spender, it doesn't matter what how much money's coming in on the top. If you haven't gotten into your reasons why you spend and how you disconnect from money, it will flow right back out.

So it's disconnecting from that we're a plastic society now. So we don't actually physically write a check. We're not connected to that, or we're not connected to cash that we have to count out. Oh my gosh, I had a problem with one of my cards and I had the cash to get groceries when very long time ago, I almost freaked out. And one of my first jobs was at McDonald's. I know how to count cash back to somebody. I was just freaking out, of like exchanging cash for groceries. And that's the thing is we're so disconnected from it's just ones and zeros and they don't even pay attention to their credit card balances go up or down or where it's at until it's maxed out. And then we're in a little freak out mode because now Cassius limited or access is limited.

So, we just get a lot of disconnect from money. That's why I love to encourage them to do a money ritual or money date. I still have to do mine weekly, which is the other part of the profit first plan is that they were only looking at it twice a month. That was not gonna work for me. I needed a more intimate relationship with money and I needed to create a different ritual with it.

So minus once a week.

Emily: I do weekly money dates also, and I've gotten my husband and on them this year, which has been really transformative. I actually think, well, I don't know. I need to have him on the podcast sometimes, so he can say what he thinks, but for me, I realized that it was so healing and part of the reason that I had been avoided in bringing my husband into it is because I was still holding onto the childhood belief.

That money is the root of argument. And so my husband and I didn't really talk about money when it was good. 

The only time there was a conversation was when there was a problem or an issue or something that needed to be worked through, which thankfully wasn't that often. But it meant that my nervous system was prepared for battle when there was a conversation around money with my partners specifically. And so by doing the money dates weekly, it's totally repattern that in my nervous system and it feels safe now. And I really agree with you. This is the same thing, even in a solo relationship with money, particularly many of my clients are avoidant as well. And the tricky thing about when you're avoidant is that you often are only looking at your bank account when you have to do something. 

You've got a login to pay a bill, you've got to do something with the credit card. And so it perpetuates, feeling of unsafety or feeling that money is leaving or I'm holding my breath because I don't know what I'm gonna find. And so it's like actually the more that we can almost use exposure therapy, right? Just look at our bank account and not have to do anything, just breathe through it and be with it. It can really change things for us. So I'm curious for you. How did you feel that your relationship with money was before you started doing these money rituals and how has that changed?

Connie: It was definitely lack my cards were, I was playing this game of like, okay, this charge is gonna happen on my card and then it's gonna be maxed out. And so I have to keep it below the max limit. How am I going to do that? And so I was the expenses far exceeded what was coming in. And so I was constantly hustled to get in, but I was also playing this float game and we used to do this in the eighties.

When the early nineties, it used to take, when you actually wrote a check and l mailed it, it would take five days for that payment to get there. And when you're a bookkeeping, you would play the float. 

So if you knew that the money was out there, but there was money coming in, that was okay, so you can mail the rent check or you could mail that check and then hope that money would come and support that. So it was funny how that came into play, but it also is an employee mindset of paycheck to paycheck. I brought that into the business and so we were running paycheck to paycheck. So yeah, there was a lot of black thinking. And then if I traveled at all, my cards would be maxed out or there would be some issue. There would be fraud on one. They would always be talking to me and I'd be like, seriously. Can't Titus go do this one thing without money yelling at me. That's why I felt it was doing. And, so there was a lot of, I had a lot of financial anxiety. It still shows up a little bit. And I worked through that now that I can breathe and I have different tools I can use, but it was interesting to look at that and I looked down a lot. 

That's where my lack was. I couldn't look up and see the opportunity. And so when I talk to people about just breathing and having that relationship and knowing what it is, and then creatively thinking, how am I gonna get out of this? What needs to come in? What money could be created, what sales could be created? What could I sell? Then we can start thinking about it differently. I worked with somebody who had an unexpected tax bill, and instead of freaking out, she was like, you know what? I'm just gonna sell my car. I don't really need my car. I can walk to work. We can be without a car for one, for a few months or a year this'll be fine. And then she took care of the tax bill. She just breathed into it, made a decision and then moved on with it. But the other part of it would be then also, would you like to create a savings account? Would you like to put some money aside? Thank it  and give it a job so that it's there for you next year. So you don't have to sell a car, make a big adjustment to your life.

Emily: I love that. I'm curious for you, did feel any guilt or shame around being in the financial industry and feeling like your own business and your own relationship with money was less than ideal? 

Connie: Sure. It took me many years to understand that telling my story is part of my journey. So I am projector a one three splinik. And my actual purpose here is to make numbers easy for people. And by doing them, my Kyron is in that money house is to share my journey and share what I've gone through. And it took me a lot of time to get past that perfectionism. So a lot of finance people are really perfectionists at heart because it's numbers, right? So they have to make sure that black and white numbers of it are really there and they stand behind it. So that's gonna cloud that judgment of the other person being a human being. 

Emily: Yes. 

Connie: And so I had to work through that before I could say, oh wait, I am a human being. I came in with divorced parents that had very different ideas about what money was a lot of lat growing up. And, that is gonna cloud how I run my business. And it's more important for me to share my story and say, yes, I found a way out and I work at every day I'm a work in progress. And things get better every year. My ability to talk about it and be more empowered by it. And I tell people that upfront because I am not gonna be the expert. I am probably just a few hundred feet ahead of where you may be, but together we can get to wherever we want. Wherever you wanna  go I can support you because I can look at your numbers all day long. I can hold the space for you, but for myself, I have to have my own support around that. 

Emily: To me, you are such a breath of fresh air because seriously, like I'm thinking of clients of mine that have asked for bookkeeping support. I'm like, okay, I've got people for you because this piece is really missing this understanding of the emotional side and the relationship with money. And it's like so many wealth strategies, so many bookkeepers, so many CPAs kind of feel like they're banging their head against the wall, or like, I don't understand why are my clients, we had this plan. Why aren't they doing it? And it's like, because they have a whole story and a whole relationship with money that has nothing to do with what you put in an Excel spreadsheet. And that's always gonna win because the feelings are what's dictating things. 

So to me, the fact that you're able to empathize with your clients. And understand, not just what's going on on the spreadsheet, but what's going on emotionally underneath, because when we can get to the root cause of it, then everything changes. And it's like, what a beautiful gift to have that in your bookkeeper and the person that's supporting you with money.

Connie: It is, I will say early in my career, I helped the bookkeeper have more avoidant or the owner have more avoidance. I would take that pressure off of them and do the numbers make the deposits take care of all of that stress. 

Emily: Yes.

Connie: So that they could run the business. And it took me a long time to realize that, this was really disempowering for them to do that. And to have somebody actually openly talk about it and want to talk about it. I had to heal myself and get to a place where I could stop enabling them or that avoidance piece, but it's really great. And more bookkeepers and accounting professionals are talking more about this. I am meeting more people. It just takes a little bit of time to find one and ask questions.

So normally we get referrals for bookkeepers or tax pros and that's great. And I'd like you to talk to probably two more people, so you can see their style, see their communication style. Do you feel like you're going to the principal's office or do you feel like somebody is really partnering with you to move that forward?

And it takes a little bit of knowledge of what you might need. So having that conversation ahead of time. About that as well. 

Emily: That's great advice. And to me, the piece that you've said around, like not enabling the avoidance is a massive, because look, so many of us are recovering rescuers and it's like, when you're in rescue mode, there's nothing better than feeling like, I get to be this person savior they're hiring me. And of course, then they're never going to abandon me because there's a codependent. The only way they can avoid looking at their money and knowing that everything is straightened out as if they have me. Right? But what you said is it's disempowering to them and it really is because in order for there to be a rescuer, there has to be a victim.

So that means that that's how we're viewing our clients is like, this poor little victim needs me to swoop in and save the day. But I think there are still so many practitioners that also are wonderful people. And just don't recognize that they're still in that victim rescuer paradigm, but having someone like you, that's like, yes, you get to be my client. Yes, I get to support you. And I want you to trust yourself with money. I want you to feel empowered, like, you know, what's going on in your business. Is like leaps and bounds ahead of what your industry is going.

Connie: Thank you. Yes. I don't believe that we're not broken. I hate this. I volunteer for an organization here in Portland. Paul accelerates and I talked to a member and she said," I'm they got all my stuff together took it to my tax pro" and they yelled at me. They shamed me cause there had been a couple years she hadn't filed. I'm like, I'm so sorry that you had that experience. Definitely, we wanna find you a new tax pro because anyone that's gonna shame you about not filing, never clicked in that there is financial anxiety happening here. And to celebrate the fact she actually took the steps to come in with two years worth of, or more years of taxes and ready to look at it and do something with it. That was a celebration we're not broken. We just need a little guidance at times and a little education and a compassionate year to listen. So that we can make an extra step.

So just holding your hand to make that extra step, because everyone can learn the finance education, they need to grow their business. If that's what their desire is, or to find the finances, to have that big dream of theirs, it can be done cause you've already been given the dream. You just need a little bit of the support around the masculine to get that.

Emily: A hundred percent. I mean, I can't ever imagine running any of my businesses. Without a financial support team, but I too was in a place at certain points in time where I was inadvertently looking for someone that I could offload the responsibility to because I didn't trust myself. And like you talk about going to the principal's office still, we meet with our wealth strategists, probably quarterly. And I will notice the anxiety come up before that meeting and I'll tell my husband, I feel like I'm afraid to talk to dad. And he knows exactly what I mean, dad is not my husband, dad is the wealth strategists. And by the way, like our wealth strategists is so sweet, so compassionate. He's never questioned any of my decisions. But it's like I think we need people on our team that do have that empathy, because when I'm going to you saying that I just made $120,000 investment, I already have some time crazy. I'm just following my inner guidance and my intuition is like, the last thing I need is anyone in my life to feel wobbly about that and go, was that the right decision?

Connie: And we often get that from, especially our bookkeeper. So let's talk about that. So bookkeepers are in the moment, day to day transactional. They're going to look at your history and they're gonna be able to tell you where you spent your money. And so when you do an expense like that, they're thinking they're just looking at the black and white of it.

And then your tax pro is looking at the tax aspect of it, right? How does that affect the year end or the taxes? And so probably an expense or an investment like that. They're like, okay, that's probably doable. That's probably going to be a great.

Emily: They're  fine.They're bookkeeper.

Connie: And your financial advisor is like thinking even longer term, right? Well, if you make this investment today, what's the ROI on it for the future. And so having all three in the same room, they all work together, but they all talk from a very different point of view when it comes to your numbers. So it's good. I did to like lean into all three of them to get what you need, but realize that they have different rules.

Emily: Yes.

Connie: They are making a big investment. Doesn't always apply. So having those people behind you that will support you and say, yes, you can do this, this great. 

Emily: Totally. And it's like us just knowing ourselves. And so it's like, I know before those meetings that like, I need to breathe and I really need to tap into my sovereignty and like, and my own relationship with money where I'm just like, you know what, it's my freaking life money and I like were like this. We decided to do this thing, we feel good about it. We feel like the money is gonna grow through circulation and it's like, I have to give myself a little pep talk. And again, not because I have the wrong person on my team, but just because I have a tendency to be in that little girl energy. When I'm meeting with someone on my financial team. So I love that we're having this conversation. I really think it's probably not being talked about enough. What are some of the mistakes, like the common mistakes that you see amongst your clients or just entrepreneurs in general?

Connie: It can depend on where they're at in their business, but first it's like living just in the moment. They're not thinking too far ahead. They may have a goal or financial goal set for the year or the next 12 months. But it's really what, how is money supporting right now? And when we live in this little box of how money is supporting us right now, our little spender can go really happy if money is really great. And we might say yes to an expense where we don't have the financial cash flow to carry us through the next whatever period of time. And so knowing If you, what your personality type is and how you're gonna approach expenses and maybe widen that box a little bit. 

So when you're making those financial decisions, you can like plan out how is that gonna affect it later. So when they live too much in the now too much based on their bank account balance that's the first one. The second one is handing it off to the bookkeeper and just letting the bookkeeper take care of it all and then not really sure what they're doing and when they give you reports. Cause they're just gonna give you reports based on the accounting tool. You're just looking at the numbers. If you need to go a little bit deeper with it, you need to have more conversation about what's in those balances and look a little bit. So this may take a little bit of Education, like what is a balance sheet? What is a profit and loss? And then structurally what's the right categories for these things. And it may mean changing your chart of account names so that when you look at the reports, you actually know what it is. Not just whatever accounting terminology gave it. And then that way you can have a better understanding of where money's going. 

But also, again, looking to the future. 

If this month was lower than last year at the same month, how is that gonna affect the rest of the year? And so I do a lot of reflections. When I look at numbers, it makes a picture for me, it paints a picture, but I'm also looking at comparative this year to last year, this month to last month. And we're looking at trends, finding the trend because every business has a season. So knowing where your season is too. And the last one I think is bandwidth. We don't talk enough about it, but just as important is money. Is your energy and the time you're spending in the business. 

Emily: Yes.

Connie: And if we're still in hustle phase, we're spending almost every waking moment we have, but you can't continue that forever. And so looking at your bandwidth, knowing your energy, like as my energy, I need to be in my introvert.

I need more downtime. I needed to adjust my day so that I can work within my prime time, but it took me a while to understand that. And bandwidth usually well fizzle out way before money well. But then you can't get back into the business if you're working off, being so exhausted that you can't get in there and sell and give back to your clients, you know, and make that big investment that you want in your business, no big investment in your business. Once you have reached burnout, we'll save it. You need to work on it yourself.

Emily:.Absolutely. And like, as a spleen and projector, that's something that you're really able to embody and I think a whole be a powerful kind of testimonial to that for your clients. I loved what you said about like making the chart of account work for you and for anyone listening, I will be the first to say, I still feel like I don't fully understand balance sheet. And I don't think it's an IQ thing because I'm really smart. I was like the 4.2 GPA, high honors, whatever. But like, it doesn't make perfect sense to my brain. For whatever reason you asked me, which is an asset and a liability and why they're categorized as such. And like, I still get confused. I have an e-commerce business and I'm like, wait, why is our cost of goods a, this versus that? And so empowering yourself to ask questions and not just feel stupid because you don't understand what your bookkeeper is giving you, but then hiring somebody like you, Connie, because like you said, QuickBooks or any of this accounting software are gonna have their standard categorization. And I actually think cost of goods is a perfect example because it's one thing when you have an eCommerce business like I do where the cost of goods is the physical product you're selling.

But for those of us that are coaches or consultants or running a service-based business. Sometimes there will be things categorized as cost of goods. And you might be sitting there scratching your head, like what the hell is this? And that is a perfectly sound question to ask. And what Connie's talking about is that even though that's the standard QuickBooks categorization, you get to rename these things so that they make sense to your brain.

Connie: And especially like if you're using a profit first system, it's about maybe creating more main accounts so you can  see the buckets. When you're looking at a report, you can see the buckets that you're spending. And so, cost of goods is interesting because I actually liked to put some of the direct expenses. If I have a therapist, I like to put the commission, she pays the therapist as a cost of goods sold because that's coming out of the revenue before we run the business. And so I'd like to put it up there on that report, but yeah, and also give yourself some space here because you usually only look at these reports every 30 days. And so your memory, you've got to like, turn that memory back on. 

Emily: Yes.

Connie: It's not something that's and over time it will get easier. So have a cheat of like what this is, or even put it on the reports. This is what it is. Now. Remember a bookkeeper may not be able to educate you on what that is. Most well, if you're paying over 65 an hour, they should be able to, can be more consultant. So, but realize that where they're at, they may not be able to walk you through it, but find somebody that can. 

Emily: Absolutely. And so I just love this conversation because again, this financial literacy piece is important. And I think particularly as women, we have a tendency to make ourselves wrong in the conversation. And so we don't always ask the question. That get us to a place of understanding. And we do ourselves a disservice in that way. It doesn't mean anything about us. If we don't understand this thing, or we don't remember what we're categorizing as a cost of goods sold, it's simply a question. And typically when men show up in that same meeting, they're just very willing to make sure that they get their needs met in a way that as women, we have to re learn that skill as kids, we knew how to get our needs met.

Connie: You did. But also when we were in math class if we got something wrong that was bad. And so having to unlearn a few things that we've learned as kids, but also remembering how we got our needs met, remember how to ask for help, but it also could have been in my family, the women supported the men folk. First and foremost and then took care of their own needs. So oftentimes we're having to relearn of what that means to take care of ourselves first, especially in our business, because if you're not taking care of yourself, there will, will not be a business unless you've already structured it enough where there's people there that to support it.

So it's about really learning how to ask. I'm just now listening to Amanda Palmer's the art of asking and so lean into those types of things. Hear other people's stories of how they learned it because everybody, I mean, not everybody has great boundaries. Some are born with it. My friend is, was born with great boundaries.

So I, around her more learning, like, what does that look like? How does that work? And then learning how to ask for what you do. 

Emily: Absolutely. So I want to talk a little bit about profits and profit margins, because again, I think this is something that's not as well understood or gets glossed over a bit in terms of the ways that we talk about money or that we celebrate money. So I know that you've had some aha moments around profit margins as well. So maybe that's a good place to start. If you could just riff on that. 

Connie: We think profit is what's the bottom line number on the profit and loss report. And that is usually what profit margin means. It's like how much money is left on the profit and loss report. As a percentage of what your revenue was brought in. And like the optometrist I work with the goal is to shoot for nine to 10% that's a good profit margin. I will say, though, what that's not taking into account is what the shareholder might be taking out from the AZ distribution, or if it's an owner draw how much they're taking out?

And so that's why when you asked the question, I was like, what is my profit margin? Because I don't usually pay attention to what that numbers. 

I have a couple of reports that I do for clients that we pay attention to, but I'm looking at how much cash are they leaving in the business, because if their profit margin is nine to 10%, but they're taking all of that out, that means they're not leaving any profit in the business to grow, to have a foundational footing, to move to the next level. And so we're always looking at if you're at a loss, cause some businesses run a loss, we've just gone through a period of time where a lot of businesses ran at a loss for many years. And if you're still pulling all your money out, that means you're financing, whatever you're drawing out. And so now you have no basis and that's, if you're a corporation, you have stock, you have ownership, you have a value there. So profit margin is an interesting number to look at, but yeah, so earlier it looked at my numbers and I'm going to double my profit margin this year because I intentionally chose to be more sustainable.

Emily: Yes.

Connie: But in 2021, I had a 4% profit margin still pretty good, but I'm looking at making that looks like eight to 9% already this year. So, and again, my income I'm pulling from my business is gonna be double that as well. 

Emily: Wow! Congratulations, that's you.

Connie: Thank you. That takes intention to do that so.

Emily: So your profit margin is after your owner draws our owner distributions. I am so glad that you spent a little time on the definitions with that, because again, I think this is something where particularly women coaches and consultants. We need to up our financial literacy a little bit around this, because sometimes it's like, my profit margins are 90% probably not. It probably means that your expenses are 10%, but then you're considering what you pay yourself and everything profit. Right? And again like, in some respects who cares? It's not that it's either right or wrong, but I think as these industries mature a little bit, it's nice if we do understand what the definitions are of these terms so that when we hear other people talking about it, we're not making ourselves wrong. And we also understand the purpose. 

So I liked that you also talked about like when profit margin is truly profit margin, you've already paid everybody, including yourself. You've already paid all the expenses and then there's money left over, that money is often the growth catalyst. So if you want to advertise or you wanna hire a new person on the team, well, how are you gonna grow your payroll? If you don't have a cushion of money in the bank to do that. And then of course, over time that could become like a one half owners distribution like a little quarterly bonus, right? If you build up enough of that profit over a few months and you haven't really had some new expenses.

Connie: And that's where the profit-first system breaks down is when we are not paying attention. So if you're putting 15% to tax or 15% to your profit account, but you're not seeing that on the bottom line number, you tend to be your cash tends to get a little tight there. So paying attention to both like we are, the profit first system is like, you are intentional as money comes from. I, well, I celebrate my money. I do a dancer.

Emily: Yes, me too.

Connie: But then you're intentionally moving money to those accounts. First, paying yourself taxes and your profits savings. And then that gives you a smaller bucket to pay your operating expenses from. But what I've seen is people will lean too heavily into making they'll make the percentages, but they didn't look at their profit margin on their profit in lost statement. And if something happened that they didn't increase their pricing or they didn't adjust for this, they added the new person, but they didn't adjust the pricing. So they'll get into crunch time around the numbers. It's like, why, why is it so tight? Why don't I have enough for my operating budget? Is that it kind of all goes together. It's not just a set it and leave it type of system. We have to look at the books, all of it together.

Emily: Totally. To me, that's why I can't imagine ever running businesses, like without a bookkeeper and without financial help and support because, it's not something that you just map out once on a spreadsheet. I mean, it's like, we've all tried this, right? Who hasn't at one point in time set a budget for themselves, whether it's a personal budget or business budget, it doesn't matter. And it looked so good on paper. It looked like, it was gonna work so perfectly. And then a few months in, and you're like, what happened this month? It's like, these are living dynamic things. And so without having that additional set of eyes and that additional support that allows you to understand the nuances, but also make some strategic adjustments, it's difficult then for the entrepreneur or the CEO or the visionary to be the visionary in their business.

Connie: When I first started working in accounting. I remember being in rooms where the tax preparer, the tax pro would say, "I want you to spend as much money as you can, whether you put it on your credit card or whatever you do, we need to get your expenses up so that your tax liability is last". So what that ended up happening is that they ended up in a cash flow crunch and they didn't get to pay themselves for the first three months of the year until they were able to readjust. And so we're also getting this advice.

Emily: Yes.

Connie: From different people that affects that profit margin. And the profit margin allows to keep money in the account. And I will tell you, your tax pro is probably going to like push back a little bit. If it's a, an old fashion numbers, purpose tax, we're decreasing your tax liability as much as we can. And you will probably owe tax at first year. If you're trying to keep more profit in the business. And it will be there for you later. So it won't happen the second year, but the more you increase that, like that rainy day fund or your walkaway fund, that's a new fund day. I just learned about that. I'm like, oh, this is an interesting idea around it, but it creates that foundational support so that you can grow, you can do something or if something dramatic happened, you would have that to fall back into. And right now we're talking recession. And so creating at least a month's worth of expenses in there.

Emily: Yes.

Connie: Really will, as the CEO, as the visionary will allow you to sleep at night, because you know that you have at least 30 days to make a decision because you have that to lean into.

Emily: And it's like the bigger your business becomes, the more important this stuff is, you know, at our agency, we've got 15 people on our team, like, you know, so we have a sizable payroll. We need to have a couple of hundred thousand dollars in the bank period because if something happens or just a cash flow, whatever, we can't go to the team and say like, sorry, there's no money for payroll.

So you're just not gonna get a paycheck, but don't worry when we get paid, then we'll pay you. It doesn't work like that. And so, you know, as we our businesses grow. If we choose to grow in that route, right? Where we have people on the team, you know, we really have a fiduciary duty. We have a financial responsibility to make sure that it's not just good for this month, but it's good if there's something unforeseen that happens as well.

Connie: Yes. 

Emily: Well, Connie, I have loved this conversation so much. Thank you for being on the show. And I know that everyone listening is gonna want to connect with you. Because this is such a needed service. And again, the fact that you're marrying sort of the emotional understanding of money with the masculine structure practicality is just so incredible and so needed. So what are ways that people can find you and connect with you?

Connie: Great. The first one is we have a website called Money Action Tip Stock.com. And there's a free report on there. If they'd like that, or at least access to more resources or if they're so inclined, I know making a connection right away. Just hearing me from a podcast doesn't always work. But if you were at any questions or felt like you wanted to further this conversation, there is a link to having a complimentary 30-minute conversation. So I wannna make, as an educator, I'd like to make sure people know what their next steps are. And then I'm over on Instagram. I haven't been playing over there very much by Metta, but I will be over there, but I'm also on LinkedIn. 

Emily: Awesome. I love it. And any final words of wisdom for our audience.

Connie: Numbers and money are not the same thing. Knowing your numbers is the black and white truth of what's going on in your business it's how you keep score. And if you can detach those two, I think you'll have an easier time making friends and bettering your relationship with money, that energetic. Resource, we all have access to, but they, they're not the same thing. And so if you can just separate the two that's will be your first action step for today. 

Emily: All right. So when you take that action steps, screenshot that you listened to this episode tag, Connie and I, and let us know what came up for you. We would absolutely love to hear it. Connie, thank you so much for being on the show. Everyone that's listening. Thank you so much for listening and tuning in and we'll talk to you soon. Bye.

Thank you so much for tuning into today's show. Before you go, I have something fun to share. Now, when you leave a review on podcasts on Apple, Spotify or YouTube. Take a quick screenshot and send it hi@emilywilcox.com. You'll be entered into drawn to win a free one-on-one Voxer coaching day with me and you help the show reach more new listeners, such a win-win. I also invite you to follow me on Instagram @emmakesmoney and to jump into my free Facebook group the money club. Which is linked in the show notes. Until next time, I'm sending you all the magic money vibes.