Ep 592: Numbers You Need To Know | Greg Crabtree Recap

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If you don’t know your numbers, you don’t own a business. You have a hobby. And hobbies don’t pay the bills. 

In this episode, we’ll walk you through the most essential financial principles every entrepreneur needs to understand to stay in business and actually grow. Whether you’re building a personal brand or running a multi-figure company, your financial foundation matters. (A lot!) 

Learn the critical numbers you must track every month, the simple systems you need in place, and how to avoid the cash flow mistakes that cause most businesses to fail. Plus, we’ll talk about tax planning vs. tax filing (yes, there’s a big difference), and how to make financial habits part of your leadership rhythm…no spreadsheet wizardry required. 

If you’ve ever felt intimidated or overwhelmed by the financial side of your business, this episode is your permission slip to take control with confidence and clarity. 

KEY POINTS FROM THIS EPISODE

  • The 3 numbers every business owner must know every single month 
  • The difference between tax planning and tax filing (and why you need both) 
  • Why separate business and personal bank accounts are non-negotiable 
  • The financial systems checklist: what to set up, even if you’re just starting out 
  • The #1 reason most companies fail, and how to make sure it’s not you 
  • How to use a monthly P&L to stay proactive and profitable 
  • Why you’re the CFO until you hire one—and how to act like it 

QUOTABLE MOMENTS

“If you don’t know your numbers, you don’t own a business. You have a hobby. And hobbies don’t pay the bills.” [00:00:05] 

“You don’t have to be a CPA. But you do have to know what came in, what went out, and what’s left over.” [00:01:10] 

“There is a difference between tax filing and tax planning. Not knowing that could be costing you thousands.” [00:04:25] 

“If it’s not in your calendar, it won’t happen. Schedule a monthly financial review. Period.” [00:07:25] 

“The art and the business go hand in hand. Your mission needs money to keep moving.” [00:10:00] 

LINKS MENTIONED IN THIS EPISODE

AJ Vaden’s Instagram 

AJ Vaden’s LinkedIn 

AJ Vaden’s Website 

Brand Builders Group 

Free Strategy Call with Brand Builders Group 

Email Your Review 

[00:00:00] the truth that nobody ever told you before you started your business. If you [00:00:05] don’t know your numbers, you don’t own a business, you have a hobby, [00:00:10] and hobbies don’t pay. The bills. So let’s talk [00:00:15] about a few things when it comes to knowing the numbers. And I think [00:00:20] that, as an entrepreneur and as you are in your entrepreneurial endeavors, [00:00:25] building and growing your personal brand, whether it’s within a business or it’s completely aside of your [00:00:30] business. [00:00:30] There’s some things that are fundamentally important, and I think the numbers [00:00:35] are a huge part of what people tend to shy away from, and it’s whether because they don’t understand [00:00:40] them or they’re not the fun and exciting part of the business, or they’re [00:00:45] confusing, and it doesn’t matter which category those fall into, those are dangerous places to be [00:00:50] as you’re growing and scaling a business or a personal brand. [00:00:53] So there’s a couple of quick things that [00:00:55] I wanna talk about. As a business owner, congratulations, you are also now A [00:01:00] CFO. And that doesn’t mean you shouldn’t replace yourself one day, but at the end of the day, this is your [00:01:05] business. And it’s your business to know your numbers. You don’t have to be a spreadsheet [00:01:10] wizard. [00:01:10] You don’t have to be a CPA and you didn’t have to go, to school and finance and [00:01:15] accounting to know how to run your business. But you do have to know what’s going on. So here’s a couple of [00:01:20] things. A quick checklist. Here are three things that you should be asking yourself and the most [00:01:25] simplest standards of, making sure that you have your ducks in a row when it comes to knowing your numbers.[00:01:30] [00:01:30] Number one, how much money came in last month. Now I know that is seemingly [00:01:35] basic, and I cannot tell you how many six, seven, and eight [00:01:40] figure businesses that I know personally where the owner of their business could [00:01:45] not tell me how much money came in last month, basic and [00:01:50] important. Number two, how much money went out, right? [00:01:52] So how much came in? [00:01:55] How much went out? And that’s IE expenses. So how much did [00:02:00] you bring in? How much did you spend? And then thirdly, how much is [00:02:05] left over. Right. That’s called, uh, revenue expenses net [00:02:10] profit. Right? But that’s simplest way to think about it. And at the very, very, very [00:02:15] basic level, those are the three things that we have to know is how much came in last month, [00:02:20] how much went out last month, and how much. [00:02:22] What’s left over. This is not about, [00:02:25] uh, doing it all yourself, but it is about knowing what to do with the financial numbers [00:02:30] and not outsourcing that and not looking at it because you don’t want to, right? So that’s step [00:02:35] one. Uh, number two, you gotta have a system. All right, so these are four [00:02:40] quick systems checklist items that I will give you about how to get more [00:02:45] intimately acquainted with your numbers in your business. [00:02:47] Uh, number one, make sure that as a business [00:02:50] owner, that you have separate business and personal accounts. That’s the first big [00:02:55] no-no, when creating some simple, basic financial guidelines in [00:03:00] your business. Personal and business accounts have to be separated. I [00:03:05] would say the same thing for credit cards. [00:03:06] If you’re gonna choose to have credit cards in your business, then you need personal cards and [00:03:10] you need business cards, you need a business account, and you need a personal account. Make it easy on [00:03:15] yourself for reconciliation. Do not mix and mingle the two. I don’t care how small you are. I don’t [00:03:20] care if you brought in $10 last month. [00:03:22] Have it in a separate account. Okay. [00:03:25] Second quick system to make sure that you have clean financials, uh, is make sure that you have monthly [00:03:30] bookkeeping. If you have to start with something as simple as a spreadsheet to track what came [00:03:35] in, what went out, and what we have left over, great. Uh, then you can elevate to simple [00:03:40] systems like HoneyBook, or we use QuickBooks online. [00:03:43] Um, you don’t have to have [00:03:45] a bookkeeper, but you have to have bookkeeping. Now, at some point, it’s going to behoove [00:03:50] you to start with an outsource bookkeeper. Then you can hire a full-time bookkeeper. Then you can [00:03:55] hire a controller and you can start building the financial engine of your company. But until then. [00:03:59] [00:04:00] You are the bookkeeper, you are the CFO. Um, and so you’ve gotta take control of this. You [00:04:05] can fractionally outsource it. You can hire someone for 20 hours a week. You can hire a company, an [00:04:10] individual, it doesn’t matter. Um, and you’ve got to have a bookkeeping system. Could be a [00:04:15] spreadsheet, could be QuickBooks, but you gotta have a system. [00:04:17] Number three, you have to have a [00:04:20] tax. Planning strategy, not just a tax filing strategy. There [00:04:25] is a difference between tax planning and tax filing, right? Tax [00:04:30] planning has more to do with your entity structure. [00:04:35] And, what are the different ways that we use the money, right? So it’s making sure that you’re [00:04:40] set up the right way. [00:04:40] It’s making sure that you’re best optimized to pay [00:04:45] taxes and only the amount that you owe. So let me be clear here about taxes. I am not [00:04:50] against taxes. I’m an American who lives in America and gets the great [00:04:55] privilege of paved roads, paramedics, police officers, [00:05:00] teachers, the fire department, red lights, stoplights. [00:05:03] Those are things I [00:05:05] greatly love about our country, and I am all about paying my fair [00:05:10] share of taxes. I call it America’s money, right? This is America’s money, and I am happy to pay [00:05:15] it, and I do not want to pay 1 cent more than I am [00:05:20] supposed to. That is the difference between tax filing and tax [00:05:25] planning. I want to pay every good cent that I owe to America to enjoy all the benefits [00:05:30] that I get as an American, and I wanna make sure that I’m not overpaying, [00:05:35] I don’t wanna underpay, I wanna pay my fair share, but I most certainly don’t want to overpay [00:05:40] because I didn’t hire the right person. [00:05:41] I didn’t know, uh, what counted. I didn’t know what was a [00:05:45] deduction. I didn’t know that I didn’t have the right entity. Those are all things that are tax [00:05:50] planning, right? And as someone who files your taxes and someone who helps you with tax planning [00:05:55] are two different people, you have to have two different thought trains on that. [00:05:59] So what’s my tax [00:06:00] planning strategy versus who’s just gonna file my taxes? That’s the third. And then the fourth is your [00:06:05] profit, right? What’s your plan for profits? Are you trying to make profits, right? I [00:06:10] imagine you are if you’re in a for-profit business. Um, but you have to have a real [00:06:15] monthly budget. [00:06:16] With revenue goals and expense limits, right? Um, [00:06:20] you likely won’t hit your financial goals if you don’t plan for them, and you [00:06:25] likely won’t hit the plan if you don’t track it, right? So there, there has got to be a [00:06:30] target of what we’re going after. There has to be a budget. Um, and that’s, that’s a well-defined [00:06:35] budget and lots of different arenas. [00:06:36] And like I said, uh, even if the budget is, Hey, next month I can [00:06:40] only spend a hundred dollars on my personal brand for X, Y, and z [00:06:45] reasons. That’s a budget. Budgets don’t have to be huge, but everyone [00:06:50] needs a budget to make sure that you’re spending and earning in ways that [00:06:55] allow you to grow. The number one reason that most companies fail is they simply run out of [00:07:00] money. [00:07:00] Don’t let your mission fail because you didn’t plan for the basic fundamental [00:07:05] essentials of financial planning. Okay. Now last but not least, I wanna [00:07:10] share just a couple of quick things of what smart, entrepreneurs do. [00:07:14] Not the only [00:07:15] things, but a few things that they do to really help with this. Number one. Make sure [00:07:20] that you have, this is a best practice. Make sure you have monthly financial review time in your [00:07:25] calendar, right? I’m very much of a believer if it’s not in your calendar, it won’t happen, it won’t get [00:07:30] done. [00:07:30] So make sure that you have monthly financial review time to review what came in, [00:07:35] what went out, and what was left over to make sure that you have time to evaluate. Do I [00:07:40] have enough set aside for taxes? Right? That’s a part of the plan is budgeting. [00:07:45] Uh, like, hey, when money comes in, I have to set aside some for taxes. [00:07:49] ’cause nobody wants to be [00:07:50] hit with that surprise bill at the end of the year plan in advance. That requires [00:07:55] time. So make sure that that time is in your schedule in advance every single month. [00:08:00] The only reason that things get out of control is that you who is in control of the money, [00:08:05] stopped looking at the dollars and cents. [00:08:06] So make time for that every single month. Number two, [00:08:10] hire a bookkeeper to help you keep things straight, right? Uh, that [00:08:15] comes at varying levels within your business, but with all the things that you have going on, uh, [00:08:20] I would say making sure that there is someone. Protecting the financial [00:08:25] realms of your business, which is what helps you keep going, is one of the most important things for you to [00:08:30] start with, right? [00:08:31] It doesn’t have to be full-time. Maybe you start with five hours a week and then you grow [00:08:35] from there. But most people think, oh, I need a va. Right. That might be true. [00:08:40] Um, but you also may wanna look at, Hey, I gotta make sure that I have money [00:08:45] coming in and I’m limiting money going out so there’s money left over so that I can continue to do this next [00:08:50] month. [00:08:50] Right. So weigh the pros and cons of who are the first [00:08:55] people that you hire. In order to keep the business intact. Uh, number three, make sure that you’re saving [00:09:00] at least 20 to 30% of everything that comes in for taxes and also hopefully some [00:09:05] profit leftover, right? So a good rule of thumb, based on what you are projecting [00:09:10] come in, you can start with 20, uh, we put aside 30% every single month of what’s left [00:09:15] over for taxes. [00:09:16] Right, and that is to make sure that we don’t get hit with [00:09:20] surprise bills and that we always have operating capital and that we never put ourselves in a cash flow [00:09:25] crunch ’cause we spent all the money that actually belonged to America, right? So make sure that you have those [00:09:30] financial practices in place and that last but most certainly not lease, is make sure that you [00:09:35] actually have a monthly p and l to review. [00:09:37] Right. Part of that time that you’re gonna set [00:09:40] aside is going over your profit and loss statement, your p and l, but you actually have to have one, [00:09:45] right? And if you don’t know how to make one and you can’t, then that’s why those initial, maybe first five [00:09:50] hours that you hire out could be a bookkeeper, because this is what keeps you in business. [00:09:53] This is what keeps you in [00:09:55] motion. This is what allows your message to get out into the world, is that you have enough funds coming in that allow you to [00:10:00] keep doing the thing that you feel like you’ve been called to do. Right? There’s the art. To [00:10:05] this, and then there’s the business side of this, right? [00:10:08] And they’re both [00:10:10] necessary. And you don’t have to, like I said earlier, you don’t have to be a finance major. You don’t have to be a [00:10:15] CPA and you don’t have to be a spreadsheet wizard to know the basics, but you gotta know the basics [00:10:20] because the basics are what are gonna keep you running so that your message can get out to the people that [00:10:25] it’s meant to help.

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