Dive deep into the financial world with me in this episode of Biz Help For You, as I sit down with the phenomenal Jody Grunden. Together, we unravel the secrets to maximizing profits, minimizing taxes, and boosting cash flow for your small business. Jody Grunden, the mastermind behind revolutionary changes in the accounting industry, shares his inspiring journey and invaluable expertise as an entrepreneur. Discover how Grunden’s innovative ideas, like subscription-based billing and virtual CFO services, transformed the traditional accounting landscape, making it not just enjoyable but incredibly rewarding for entrepreneurs like you. Join us as we delve into the critical metrics every business owner should be monitoring, including cash position, cash flow, and profitability, and how understanding these can drive smart financial decisions and long-term success. Unveil the art of effective price increases and the impact of consistent financial management on your business’s growth. Grunden’s practical advice and real-world examples will empower you to take control of your business’s financial destiny. Don’t miss this opportunity to gain invaluable insights and actionable strategies that will elevate your business to new heights.
Key Notes
- Mastering cash flow forecasting leads to increased profits and financial stability for your small business.
- Innovate your financial management by leveraging virtual CFO services to optimize your business’s cash flow and profitability.
- Learn the importance of maintaining a healthy cash position to drive sustainable growth and success in your entrepreneurial journey.
- Achieve consistency in your business operations and financial management to unlock hidden potential for increased revenue and decreased costs.
- Effectively communicate price increases to clients to enhance the value perception of your products or services and maintain positive client relationships.
Links
- https://www.summitcpa.net/
- https://www.linkedin.com/company/1258494/admin/
- https://twitter.com/vcfobyanders
- https://www.facebook.com/vcfobyanders
- https://www.instagram.com/vcfobyanders/
- https://www.youtube.com/@vcfobyanders
- https://podcasts.apple.com/us/podcast/the-virtual-cpa-success-show-for-creative-agencies/id1481877575
- https://www.tiktok.com/@vcfobyanders
- https://www.summitcpa.net/blog
Offer
Jody is offering a free VIRTUAL CFO CONSULTATION (summitcpa.net)
Meet Jody
Jody Grunden is an accounting visionary with over 20 years of experience. He has helped pioneer innovative changes within the industry, including the introduction of the first subscription-based billing method employed by an accounting firm. He is the author of two books, Digital Dollars, and Cents and Building the Virtual CFO Firm in the Cloud.
Together with his partner Adam Hale, Jody co-founded Summit CPA Group in 2002. It was the first fully distributed accounting firm in the country. In 2020, Summit merged with Anders CPAs + Advisors and is now recognized as Summit Virtual CFO by Anders. Jody’s specialties include Virtual CFO Services, Creative Agencies, and Remote Team Management.
Candy
Well, looking at financial information is important and that is 1 of the things we want to do is share with our clients the financial information. But a lot of times
they do not understand it or they do not know how to use the information in terms of metrics I would love for you may be to talk about Some of the metrics that maybe
entrepreneurs should be focusing on when they want to grow their businesses and how do they measure that information.
Jody
Yeah. The 1 metric that I say that all entrepreneurs need to know and need to have more so than any other is their cash position. And that metric we
always tell clients you want to have at least 10 % other annualized revenue in the bank at all times and that equates to about 2 months’ worth of expenses. If you want
to be conservative or risk-averse, then you want to be closer to 30 %, which is about 6 months or between 2 to 6 months. Now if you do the math, there is there is a
formula, there is a cash flow formula that goes through that, but it equates to Roughly 10 % to 30 %. And so again, those are the 2 metrics. Now why do I
say that? And the reason I say that is because the advice that we would give depends upon how much cash you have in the bank and it is kind of funny I can you
know, we can have 2 companies that are side by side, you know the same opportunity.
And I would tell 1 company, absolutely not tell the other company to jump on it like crazy. And that is because the cash position you are in because the more cash you have the
more risk that you can take and that is so like for instance, the biggest thing is, we get to a point where a lot of our a lot of our companies want to say, hey, I need
somebody to do sales for your business development. I am tired of doing it myself. You know, I am the owner, I am tired of doing it, I want to hire somebody to do it.
Well, If they have got a lot of cash, if they got that 10 % or 15 % or whatever that might be in the bank, I going to say, yeah, it is a good it is a good risk to take. I think you
can do it knowing that it is going to take a little bit to build that person.
Up able to bring the revenue in and knowing that there is going to be a cost associated with that, if you have got 5 % in the bank or maybe even less, there is no
way I would advise you to hire that salesperson. I would say that is got to be your job until you bring it up. To that, 10 to 15 %, and that goes with really every
recommendation that I would make. There is a lot of metrics we can talk about candy. But the biggest 1 is that cash position and that holds, especially for those
companies that are under a million dollars in revenue even more so with companies that are over it get you get bigger and bigger and bigger and that cash position goes
because keep in mind a million dollar company is $100,000 in the bank, you know, 10 million company needs a million and so the money grows as you know, as your
revenue grows in there.
So that is the key metric that every business, no matter if you are a plumbing company, if you are an electrician, if you are computation, it makes it does
not make any difference, it is all agnostic, you need to have that 10 % of your annualized revenue in the bank as a bare
