Small business marketers, the Marketing CLARITY Podcast (formerly TriPod) is for you if you’re looking to create better content and be a more informed digital marketer. Hosted by Ross Herosian (a Marketing coach, content creator, and entrepreneur) episodes are a mix of helpful Marketing tips, digital marketing and social media updates, conversations with subject-matter experts, and his own unique perspective on how to promote and grow your business. So sit back, relax, and let’s get pedaling!
In this episode, Ross welcomes Parker Stevenson. Parker is managing partner and Chief Business Officer at Evolved Finance, a bookkeeping firm that specializes in helping online entrepreneurs to build a more profitable and financially stable online business. You may be asking yourself why a marketing podcast is talking about something related to bookkeeping or finance? The simple answer is as your business grows, you need to have a good grasp on your financial health in order to support the ongoing marketing, promotion, and growth of your business. Be sure you grab a pen and paper because Parker drops some real nuggets today!
In This Episode...
What is Evolved Finance?
Founded in 2010, Evolved Finance is a bookkeeping firm for online businesses. Our mission is to help online entrepreneurs, such as online courses, membership sites, group coaching programs, and one-on-one coaching influencers, develop and grow financially stable businesses using our bookkeeping and e-courses.
We have a team of virtual bookkeepers and account managers across the country that help our clients get their books done on time each month. We differentiate ourselves from other bookkeeping services because for us, it’s not just, “Okay, your books are done. Now, go file your taxes.” Each month, we’re trying to give our clients the data and the information they need to make better decisions in their businesses. We want them to feel more comfortable with their money and feel clear about what’s going on in their businesses so they can move their businesses in the direction that they want, which will hopefully be much more profitable businesses.
What are the most important expenses a creative business owner needs to be monitoring?
First and foremost, a business owner needs to figure out the cost of customer acquisition. For most online businesses, this expense mainly comes from online advertising on Facebook, Instagram, Pinterest, or Google. Granted, some of the larger online businesses get organic traffic from SEO, huge social media audiences, and content marketing. This definitely helps cut costs tremendously! But, it’s becoming increasingly important for almost all online businesses to dabble in some sort of paid advertising in order to get their offer in front of more people faster.
The second “make or break” expense to track is labor. Often businesses, especially if they’re growing quickly, have a tendency to just hire people because there’s work that needs to be done. It’s easier to just hire a person and figure out how to pay for them versus looking at systems and processes and figuring out how to become more efficient with what you have.
Otherwise, there are very few other expenses that will make or break our online-based clients. Of course, if you have an inventory-based business or a manufacturing business, there are other considerations that should be made. Please contact a specialist with any questions.
What are the top three financial mistakes online business owners make with their finances?
The first thing businesses should do, and some people might think this is totally obvious but it happens all too often, is keep business and personal finances separate. This step will make your bookkeeping and accounting easier and let you find clarity between the two.
The second financial mistake business owners do is bury their heads in the sand and ignore the financial side of their business. Often business coaches like to advise business owners to work on the things they’re good at or have a passion for. This is awful advice (until you are big enough to hire somebody to do it for you). Sometimes you have to roll your sleeves up and get your hands a little dirty with some of the stuff that you don’t really like, at least for a little while. At the end of the day, if you’re not a numbers person, then you have to at least get a baseline understanding so you can make sure these things are being taken care of properly.
When you’re an entrepreneur and you’re the owner of your own business, you have to some degree be a jack of all trades, right? Especially if you’re just getting started and you have no budget for outsourcing. But as the business grows, it’s the business owner’s job to make sure all the various departments or all the various aspects of the business fit together. So if you fundamentally don’t know how finance is supposed to plug into the rest of your business, you’re going to have a huge vulnerability in your business
The third piece of advice is to get an accountant. Don’t confuse a bookkeeper with an accountant. Bookkeepers don’t file taxes. If there’s anything we’ve seen that can make entrepreneurship become a nightmare, it’s tough trusting the wrong person to do your taxes. One of the costs of doing business every year should be paying an accountant to file your taxes properly.
Mike Michalowicz's book Profit First: Love it? Hate it? What are your thoughts?
The book overall is a huge testament to how much people are looking for a financial system that works. Profit First came out of the need of the author, who was running multiple businesses, to just get some sort of financial insight. It’s essentially an envelope system where you take your income and you move it into different “envelopes”, with those envelopes being different checking accounts. I think the system in Profit First is great if you don’t have any systems, whatsoever. It’s a great first step! Then hire a bookkeeper to help you make sense of the data.
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