Episode 051: Show Notes
Today on the podcast, we have Parker Stevenson of Evolved finance. We are like super pumped for you to hear from him because he’s actually one of our few male team members. Parker and his business partner, Corey, not only do the books for other online entrepreneurs, but they also coach businesses along the way. We were super excited to start working together in the new year — we had lots of things going on at the time, so it was the perfect moment to get them on board.
In this episode, you are going to learn a lot! Parker shares his opinion on small businesses DIY’ing their books, if you should do that, how you should do that, and what in the French toast “your books” even means. We go over trends that he has seen in the online business entrepreneurial world, his best tips for getting your finances organized, and he even goes through and talks to us about what the heck a profit and loss statement is and how that might be the next best thing since sliced bread when it comes to your business. We know you guys are going to love this episode, so we can’t wait for you to give this one a listen.
Is It Worth It to DIY My Own Bookkeeping?
When it comes to business owners doing their own books and filing their own taxes, Parker believes it is so NOT worth it. No, this is not because he is biased and wants more clients; it’s simply because he believes that every entrepreneur can spend their time so much more wisely. As the CEO and founder, your main job should be to go out and generate revenue for your company. Wasting time trying to do your own books and keep everything in order is not going to help your company grow. If you, as a new business owner, are spending hours or even days crunching away in Quickbooks or in Zero or whatever bookkeeping software you are using, then that’s not a very good use of your time, especially when you are just starting out.
What to Look For When Hiring Someone to Organize Your Finances
The first thing that every entrepreneur needs to find is an accountant. That is much more important than hiring a bookkeeper, especially in the early stages of your business. You can simply keep track of all your income and expenses on an Excel spreadsheet, hand that over to your accountant, and let them figure out exactly how to file your taxes based on the information that you have gathered. Having someone who does this every day for a living to help you make sure that you are filing your taxes properly can be extremely beneficial and will help prevent any crucial mistakes from happening.
Is There a Magic Number?
Oftentimes, new business owners want to know whether there is a magic number of clients, sales, transactions, or employees that will give them an indication that it is time to hire a bookkeeper. Well, spoiler alert, there is no magic number! In fact, it all comes down to individual cases and the scenario that you find yourself in. If you are struggling to keep track of the sales you’ve made, or you just cannot seem to stay on top of what you are paying your employees or contractors, then that is a very strong indication that you may need to hire someone to help you organize and keep track of every transaction that is happening within your business. The main point is to recognize when you are no longer in control, and hire someone before things get too overwhelming and disorganized. Don’t let it catch you off guard!
Insider Accounting Secrets of the Online Entrepreneur World
When it comes to running your own business, one of the most important things you can do is to always know your numbers! Because at the end of the day, you have two options as an entrepreneur: make more money or spend less money. Those are the only two things that are going to affect your bottom line. So knowing your numbers and looking at your profit and loss statement really gives you the time to reflect and examine why you made more money or why perhaps you did not hit the goals you were hoping for. If you don’t have any financial data in your business to look at, you are definitely missing out on that opportunity. So again, know your numbers, people!
Using Your Numbers to Find Your Focus
Focus is something that every entrepreneur struggles with, not just from a procrastination standpoint, but also with regards to knowing exactly what to focus on in the first place. If you are building a lifestyle business where you simply want to provide a great service and support your family, there is a whole lot less of the corporate “analyze, understand the data” mentality present. So looking at your numbers and realizing where you should and should not find focus is crucially important to help you stay on track.
Understanding Your Profit & Loss Statement
Your profit and loss statement is essentially the report that shows you how much money your business is making, how much money your business is spending, what you’re spending your money on, and how much money you have left over. Now, the reason it is so important to have somebody managing the P&L for you is because someone needs to go through all of your business’ transactions and make sure all of those transactions are showing up on the profit and loss statement in the right way and that they are going into the right categories. When you start seeing your numbers in front of you every single month it changes the way you think about what you are going to do next for your business, and truly allows you to make decisions based on actual facts, not assumptions.
- Find out why, as an entrepreneur and new business owner, it is not worth it to DIY your bookkeeping. [0:03:45.1]
- Understand what to look for when you are looking to hire a finance expert to help you in your business. [0:06:28.1]
- Learn why there is no true magic number that will indicate whether or not you need to hire a bookkeeper. [0:12:44.8]
- Discover the insider secrets of the online entrepreneur world and why knowing your numbers is crucial for your business growth. [0:20:35.6]
- Find out how to use your data and numbers to better focus your business efforts and strategies. [0:31:04.4]
- Learn how to read your profit and loss statement, and what it actually means for your business. [0:35:53.8]
- Separate your business and personal finances and accounts.
- Hire an accountant you can trust to give you good guidance.
- Then when you are ready, hire a bookkeeper.