407: Bookkeeping Mindset with Anne-Marie Kaden
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Are you a numbers person? Whether you’d describe yourself as one or not, you run a business, so understanding your numbers is critical! Some people think it’s too complicated, others may have an emotional block to diving into them, but the fact remains that you will struggle to make sound decisions without drilling into your books. Anne-Marie Kaden, owner of Tiny Paws Pet Sitting & Tiny Paws Book Keeping, joins the show to share her passion for bookkeeping. She walks us through how good record keeping and number crunching helped her own pet sitting business, and why even knowing a little can be game changing for you. Anne-Marie discusses the different accounting methods, how to choose the right one for you, and even some best practices for using accounting software.
Main topics:
Managing fast growth
Relocating
Accounting methods
Making informed decisions
Main takeaway: Your mindset matters, even when it comes to your accounting and bookkeeping.
About our guest:
Anne-Marie Kaden has been involved in animal and pet care all of her professional career. She built and ran a successful pet sitting business in North Carolina from scratch to six-figures in just five years. She sold her first business in 2022. Anne-Marie knows and understands the pet care industry intimately and is now operating her second pet sitting business, Tiny Paws Pet Sitting in Colorado alongside her bookkeeping operation.
She holds a BS in Animal Science from Virginia Tech, which provided structure to what has become her life’s work. Anne-Marie has worked in both small- and large-animal veterinary hospitals, managed private equestrian barns, taught riding lessons, and worked on ranches as a wrangler and trail guide.
She and her family relocated to Monument, CO in July 2022 from North Carolina seeking bigger mountains and a more active lifestyle. Her husband, two kids and their canine partner, Percy, enjoy being outside, hiking, camping, and kayaking.
Links:
annemarie@tinypawsbookkeeping.com
https://tinypawsbookkeeping.com
https://tinypawspetsitting.com
https://www.linkedin.com/company/tiny-paws-bookkeeping
https://www.instagram.com/tinypawsbookkeeping/
https://www.facebook.com/tinypawsbookkeeping
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A VERY ROUGH TRANSCRIPT OF THE EPISODE
Provided by otter.ai
SUMMARY KEYWORDS
business, pet sitters, client, expenses, bookkeeping, year, numbers, pet, decisions, pay, business owner, spend, service, north carolina, money, income, employee, month, talk, knowing
SPEAKERS
Collin, Anne-Marie K.
Collin 00:02
Welcome to pet sitter confessional. Stay, we're brought to you by time to pet and pet perennials. Would you describe yourself as a numbers person? When you see a spreadsheet? What kind of feelings do you have? On today's episode, we talk with Anne Marie Caden, owner of tiny paws, pet sitting and tiny paws bookkeeping, about the critical nature of number crunching and understanding how your business operates. You see whether you describe yourself as a numbers person or not, you are a business owner, which means you inherently must know about numbers, at least a little bit to understand what's going on. And Marie talks about growing and moving her pet sitting business and we dive into the numbers you need to know to make sure that you're successful and know how your business is operating. Let's get started.
Anne-Marie K. 00:51
Absolutely. So I've been a small business owner since 2017. With a strong passion for animals, just about all of my life. We started in North Carolina. I'm an East Coast native from Virginia, my husband and I raised our family in North Carolina till 2022. And we decided to pick up and move everything to Colorado on a little bit of a whim. So it's been quite a journey for us the last year so now, I had my Animal Science degree in 1999 from Virginia Tech. So I've been in animal care just all my life. Certainly my professional career, worked everything from being a trail guide and wrangler and national parks to horseback riding trails, a riding instructor, a livery groom, vet tech for large and small animal clinics. So it has been really every part of my life. For us, I got started in 2017 when I decided to go from a stay at home parent to a pet sitter, who just wanted a little bit of extra money. Now that my kids were in school, it just exploded. From there. It was quickly went from a part time business to a full time business and a few months.
Collin 02:12
Yeah, you you had experienced some pretty rapid growth over the course of five years out in North Carolina. What Why do you think that was
Anne-Marie K. 02:22
lots of different reasons for us. We went from a startup with just me so low in 2017, to almost six figures by 2022, and nine part time petsitting staff. At that time, we were it was a great time. For us in 2017, the pet industry was exploding. We were seeing it grow from 2010 to 2019, from a $48 billion industry to almost $72 billion. So huge growth there. When the pandemic hit in 2020. We saw lots of families get new pets. I mean, we heard the stories about the shelters that were emptying because people were adopting left and right. And for us that just fueled a lot of growth in our area. We almost doubled our gross income between 2020 and 2022. At that point, we were also located in a prime spot in North Carolina, we were in a suburb of Raleigh, it was one of the most popular places to live in the US. In fact, the town that we serviced in Fuquay Varina, North Carolina was just named in the top 15% of places to raise a family in the US. And so we saw a lot of people moving to the area over those years, we were perfectly situated geographically between the beach and the mountains. So when the pandemic hit, we, our clientele for vacation clients were still able to travel to either location and still be in relative isolation. So we maintained about 60 65% of our normal business in 2020. Despite the shutdown that a lot of the US saw our community we were very active participants in our community for the 16 years that we live there. I was a member of the PTA, local community boards and spent a lot of time with our chamber of commerce, just as a volunteer. So that exposure really helped to build my brand identity when we started the pet sitting business there. We worked really hard to build a business that felt like a family for both our staff and our clients. And I made it a point to make sure everybody always felt welcome, and that we were always working as a team. And I think that in a small suburban community environment really helped us into terms of gleaning our clientele. Well,
Collin 04:52
that's brings up a really important factor of location does matter even in a service industry or even a service business where, and especially for those of us who are starting a business where we live, where we're not moving to particular area, we're not planning and scoping out areas of like, oh, that's, that'd be a great place to live, it can seem a little like, well, this is just where I live, right? I don't know. And we may be familiar with the area, but we might not be exactly intimately knowledgeable of the dynamics of the area. So when you, you know, part of that is just being really connected with the community to get a pulse for what's going on how it lives, you know, what drives the industry where people's incomes are. And we have to have a really good understanding of that to make the most out of this kind of business.
Anne-Marie K. 05:41
Absolutely, absolutely. That that sort of connection that you have with people with that community makes a big difference, in my opinion,
Collin 05:48
when you talked about building a brand through that was that building? Were you conscious of how people perceived you? And the kind of business were you running? Or were you intentionally trying to set the tone and the talking points?
Anne-Marie K. 06:02
Absolutely. So when I first started my business, we were known as a different name. And we switched it within a year to the pet professionals. Because I wanted to be seen, apart from a lot of hobby sitters that were growing, I mean, 2017, we were seeing the growth of wag and rover, people were coming into the industry as pet sitters, almost in droves in those times. And so being seen as professionals, was important to us, and we focused on that identity, doing lots of education. You know, I mean, it went down from everywhere to the colors, we chose for our logo, how we positioned ourselves in the community as experts. The tone of voice we use when we communicated with people was from a point of expertise, rather than cute, cuddly, and younger. So that I think definitely helped us from there, it was very intentional for us.
Collin 07:10
That tone of voice is really difficult to nail and because I know just for us personally trying to walk that line between connecting with the pet owner at the level where they are, if the cute, cuddly smooshy GUI, you know, you know, almost baby talk voice like that. That's definitely one way to communicate with somebody, versus the more straight talking forward to the point. i It's hard to describe exactly that. But you know, but that more professional tone that comes in. And I think some people may steer clear from that, because they don't want to feel impersonal. Because it can feel like that if when you start talking in like corporate speak, right? Where you're like, oh, like it's hard to walk that line, but you want to connect with people but also wanting to be viewed to be be taken seriously.
Anne-Marie K. 08:00
Yes, it was, and I am the furthest that there is from a marketing person. So it was a really difficult for me to to grasp branding and identity. I had a fantastic team that helped us get to that point. But yes, it can be hard to be expert and not cold. It was definitely more difficult that way. I think being in the animal industry helps because it lends you to the to the warm ups already, but certainly a fine line.
Collin 08:34
Yeah. And I guess you know, you know, kind of looking at how language other people are using or I like looking to other industries, just to see how people talk in the tone of voice. They use the other service industries that that have a degree of that professionalism, you know, like housekeeping services or all sorts of repair companies or things like that, like this, there is this, they understand that professionalism, that quality that people are looking for that respect that they want to receive from their clients. And so kind of borrowing some of that tone and intentionality. I think it's really important for us as we consider how we're viewed in our community. At the beginning, you mentioned that you had moved from North Carolina to Colorado on a on a whim. So what was the what was the transition? Like, kind of across the country there?
Anne-Marie K. 09:21
Um, so it was insane. I do not recommend it the fashion but we did. We were I mean that from the bottom of my heart, we were in a place both financially and with our family, that it made sense that if we wanted to move where we were, now's a good time. Our kids had been in virtual school for two years, and my oldest was getting ready to transition into high school. So if we were ever going to make a move, find a different place to live now is the only time to do it. We decided very quickly that Colorado is where we want it to be and are Really 2022 We took a trip in February to come out to the state to tour the area decided then that this is where we wanted to be. By April, we had our house on the market. By May, it was sold. And by June, we had the house packed up. And we were driving cross country for this. So it was just pure insanity. To that it was a very fast move. Because of that, we decided that the best thing for our business in North Carolina was to sell it. While my intentions in the very beginning had always been to build that business to be passive income and a retirement source of for us, we were not there yet, for me to be that absent and that far away from the business in Colorado and manage it from North Carolina, we were exceptionally fortunate that we had a pet one of our employees decided to take on the business for us. So that helps tremendously in getting it sold.
Collin 11:07
Yeah, somebody who is already intimately knowledgeable of the business and how it works and how it operates. You already have a relationship with them. But when you look at how your long term plan for the business of going, Man, this is something that I'm trying to build I'm trying to set up that's going to be really important for years down the line, and I have this dream for this business. What was it like shifting over to something different? Did you have to, you know, look at you know, change retirement plans? Or, you know, how did you walk through that discussion, because that's a, that's not an insignificant thing to do.
Anne-Marie K. 11:43
Yes, it was really difficult for me both emotionally, to let go of of that goal. For the business. It was a baby that I had nursed from infancy to this point over five years. So sending it off was was a hard decision. It was certainly it factored into our family discussion of moving, that was a big part. You know, it changed a home finances for us. And we had to adjust to that. We knew that coming to Colorado, we were probably not going to build a similar business here. Which is interesting. And I'll get into a little bit more of that too. But in terms of deciding to sell, and making that emotional decision, it was hard. It was not when we came by easily. And I still flip flop about whether we made the right decision. And I think that's always a factor. When you own a business like this, there will always be questions of what you did, what it's right, what it's not, and how it works out. We're grateful where we are now. So so it's been good.
Collin 12:55
It is hard to to judge of your decision past decisions, but while recognizing the limitations that you had on yourself at that time, because I know Meg and I have moved a couple times. And each time we moved, we just straight up, let the business go. We just closed everything down and we moved to another location. Looking back now we're going oh my gosh, could you imagine where we would be if we had left something behind? Or if we had tried to sell it, but it's like, we didn't know about that. At that time. We and I we weren't we weren't knowledgeable, mature enough ready to go through that process at that time. So we're gonna have to just sit back and Okay, thankful for that experience. It set us up for a lot of success now. And I know what I can do to do differently here. But you're right. Sometimes you do sit though, and go read when you're putting your head to sleep at night going reviewing some of those past business decisions going? And what if, what if that is part of it and just having to recognize No, like, that was for purpose. And I have you you have to at the end of the day, decide to move forward from that onto onto the next thing.
Anne-Marie K. 14:01
Absolutely. And that's where we're at now. I mean, you know, could we have managed it from afar? Maybe? We don't know what I have. But I'm grateful that it succeeded past me and that we left a little bit of legacy behind us in North Carolina for sure.
Collin 14:16
Yeah. Now, when you when you made that move, you mentioned about you know, did you know immediately that you want to start another pet sitting company when you move to Colorado? And if so what kind of prep work or any did you do prior to you getting feet on the ground at your new location?
Anne-Marie K. 14:34
So yes and no. I am not one to sit on my laurels. I stay busy no matter where I am and what I'm doing what I say. We gave ourselves a good 60 days here to get our kids settled and in school without really moving towards anything in particular. I knew that I would start a business I was not entirely sure what that would look like. But knowing that petsitting was probably somewhere in that mix, certainly before we move when we made the decision, we were coming here back in February of last year, I started getting involved in local community groups here in the areas that we were interested in, so that I could get a feel for what local communities were doing. And that meant looking at locations anywhere from Fort Collins to Colorado Springs, which is sort of the whole eastern sideboard of Colorado, if you know the area. We narrowed down our search, we're just north of Colorado Springs here. And once we made that decision, we I got even more involved in the communities here I connected with other pet sitters that were in the area, I did research on who was operating who had established businesses nearby, just to know and get kind of a sense for what was going on in the pet sitting industry here. And that helped a lot with getting some some framework around what we decided to eventually do.
Collin 16:07
I want to focus on what you start off by saying they're going you gave yourself 60 days to get settled. And I think that that is so critical to these kind of moves and changes because how often in our lives, do we go from one thing to the next to the next to next, next next without ever having a chance to breathe, and collect ourselves and really go? Ah, okay, now that I have a clear head, you know, maybe maybe not all the boxes are unpacked yet. And I still don't know where I packed the pancake flipper. But, you know, I would I have that big stress out of my out of my life right now. And I could fully focus on all of this, as opposed to trying to rush right in and go, I have to make all these decisions I've graduated. And that feeling of I have to be rushed. I must be doing because you know, you've inside like you like to be busy. And that's what a lot of us are. We feel like we've got to have all we always got to be juggling something. If I'm not juggling something, then what am I even doing? Right?
Anne-Marie K. 17:05
Absolutely. I mean, one of the biggest lessons that I think any entrepreneur or business owner learns with their business is when does they know when to back off, because it's very easy to get burnt out very quickly when you just run headlong into the next big project. And that was something that I certainly struggled with in the first couple of years of my first business in North Carolina was taking on too much work. So I had learned that lesson and learned that we needed to have some breathing room. And certainly there was an emotional toll of leaving the pet professionals in North Carolina behind and I needed to kind of let that release happen. Before I started something new.
Collin 17:46
Yeah, being okay to grieve that, right. Because you're grieving the loss of those relationships, those connections, you're also probably still grieving the loss. I'm gonna say that word, but of the business of what you know, it didn't quite work out what you had originally planned. So there was a grief through that, that you had to allow yourself to. Because if you didn't, then you've got some unresolved stuff that you're bringing. And now you're reacting out of, you know, unresolved unspoken assumptions and expectations. And it really does spiral from there when you don't give yourself that time to breathe and collect. You started one business in North Carolina. Did you do anything different when you started your business in Colorado? Yeah, very much.
Anne-Marie K. 18:26
So, um, I had, by the time we left North Carolina, I was pretty much out of my business and managing it and not in the field. I mean, I needed to be that, in order to sell it, it had to be turnkey for the next person to take over. And I really needed to remove myself to see what the business would do and stand on its own two feet without me. So in moving, I discovered that I was not as passionate about working as many hours as would be required for starting up a full time pet sitting business here. I had gotten used to having my weekends and holidays back and the work life balance of not being gone from six in the morning till nine o'clock at night, most days. So when we came here, I had to make the decision of whether or not I was going to continue with petsitting full time, or have it just be a part time dalliance of sorts. So it's a much smaller part of my life these days, I have a select few clientele. I definitely run my business as a little bit more of a boutique, pet sitting business with not really big plans to grow it just yet. That may come in the future. We'll we'll have to think about that as things go, but wanting to stay in the petsitting world. I love the people that I meet I love the industry. I love the sense of entrepreneurship that comes with being a small or micro business such as most pet sitters are. We all know you wear all the hats all the time, that it's a busy, hectic lifestyle, juggling both the work and the managing of the business. And I wanted to stay involved in that process some way. So then came our bookkeeping business that we decided to do alongside our petsitting. Not necessarily the two things you think go together when when you think pet sitters, but a lot of people fall into the industry without a lot of business background, and I see that it's a place, the bookkeeping side of pet sitters, or any pet care business is not fully supported in our industry. I don't see a lot of bookkeepers. I don't see a lot of talk about bookkeeping or accounting practices. It's just not common in the conversations that pet sitters have amongst ourselves with this, so it felt like an easy place to get started.
Collin 21:10
Was that something that you had experience with before? Did you develop those skills from running your own business? Or did you just see a need and go get educated about that?
Anne-Marie K. 21:22
It was something I learned, really by the seat of my pants and owning a business. I have always been a numbers, Person Number math came easy for me. So it was a place where I didn't feel the need to outsource it. When I was doing it myself. I got very good at it, it was an easy part for me to do. So I decided to to see if that was a viable Avenue. When I got started, I found a bookkeeping course, a certification course that I could take. So in August of 2022, so just about two months, six weeks after we got here, I decided to see if that would be something I could do. And a three month course I finished it in three weeks. So I thought this is obviously something that I liked to do. I was motivated to do it. Yeah. And then by October, I had my first client. So it again started very quickly for me.
Collin 22:22
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22:27
becoming a time to pet clients has been a game changer for us. We can give our pet services clients real time, cloud based information they never imagined they'd be interested in. And most importantly, to me personally, I can better manage my company and look forward to more and not a small thing. Time to pet is responsive to my requests for new features and modifications to existing one.
Collin 22:52
If you're looking for new pet selling software, give time to pet a tribe, listeners of our show save 50% off your first three months by visiting timeshare.com/confessional. You mentioned you this is a numbers talk thing. And yes, I do recognize as well that many times when we start having these conversations or people start thinking about this. The the glassy look comes on the staring off into the middle distance the oh I'm I need to go Polish something or does something right now. When people say no your numbers, numbers for business, what does that mean to you?
Anne-Marie K. 23:29
Oh my gosh, it's everything. I don't think there's a single decision you can make in business without knowing what your numbers are. Can you hire employees? Do you have enough money to purchase additional software or equipment or expand in any fashion? Are there there are different avenues that your business can pick up different income streams like all of that revolves around knowing what your numbers are today to be able to make those informed decisions.
Collin 23:59
It really is powerful, because in order to do that, because there's the there's the emotional side of us that wants to do things to help everybody to do everything to be all things to all people and then there's just the hard cold reality of at the end of the day, I have to put food on my table. And I have to put I have to repair my car and I have to pay for my you know, my my children's lunches and I have to have this insurance. It's there's so we have to make sure our business works for us. Ultimately, right because it's that's a purpose that it is serving. Yes, it's to to serve other people and to serve them with excellence and care for pets. But we get something back from that and that is being able to afford our lifestyle.
Anne-Marie K. 24:43
Absolutely. And that's one of the prime tenants of my bookkeeping practices to get people to think about what they need out of their job out of their business before anything else takes place.
Collin 24:58
You mentioned accounting practices. What are their different forms of accounting or different accounting practices that we just as a business need to be aware of and kind of understand the concepts around?
Anne-Marie K. 25:09
Sure, there are two main accounting bases. The one most people are familiar with is a cash basis accounting, which basically says that in our bookkeeping, we're going to count the actual money payments that are received each day and the money we spend out of it as it happens. The other counting basis is called accrual counting. And that's a little bit more nuanced where it takes into account what you've sold in services, but maybe not necessarily what you've received in payments. So when you create an invoice for services, today, that may not actually happen until a month or two from now, your accrual accounting takes that in as money that has already been earned, you've already sold it to your client. In addition, any vendor bills that you may be Oh, but have not yet paid on also come into account versus when you physically cash accounting is when you physically exchange money and a hand, whereas accrual is a little more forward. But that's
Collin 26:11
that real time coming going in and out as we operate versus the accrual of okay, well, this is my can happen for six months, or I've got, you know, I've got these payments that are coming out that I've paid for services that I haven't yet rendered or haven't been yet rendered to me and couldn't keep track of those is there isn't one better than the other, or one that fits more for the model for how most pet care services and businesses operate.
Anne-Marie K. 26:34
So I think most pet sitters would probably operate on a cash a cash basis accounting system. It's a very, it's a simpler one. And it can just depend on it, there's a tax advantage sometimes to use the cash accounting system, because it's the money in hand versus money that may be coming later down the road. So that's definitely a question to have with your accountant or CPA at a time. Accrual accounting is a little bit more granular have a look at your look at your business, because it's taking into account either future money that is owed to you or money that you owe out. So to me, it's a little bit more of a full picture look of your business. But again, cash is simpler. Most people operate from that as a mindset, they think about the money that they deposited into their bank versus the money that's going to come in later. So it can be a bit of a personal decision for each business to choose which way they want to go.
Collin 27:33
And so that's a little bit about the difference between those different methods. Are those something that we can go back and forth between once we pick one? Or do we have to stick with one once we've made that decision?
Anne-Marie K. 27:46
Businesses are required to pick one and stick with it. There is an approval process with the IRS if you decide to change or your business changes and requiring you to pick accrual accounting, but most most stick with it once they've chosen.
Collin 28:03
And is that you you stick with it within that fiscal year? Or is that really like once you commit to cash or accrual, you have to stay that so it's consistent from year to year after that.
Anne-Marie K. 28:13
You have to stick with it so that it's consistent. Yes. Okay.
Collin 28:17
Can you give an example of when it would be when it would behoove us to make that switch to, let's say, we start out with cash and go okay, now it's time to do an accrual for us.
Anne-Marie K. 28:27
Sure, um, if you are making payments to vendors, or collecting payments from your clients on a credit basis, some like if you are selling something on a term, or a net 15 terms, or net 30 terms, as those are some terms that people might be familiar with, meaning that you're not collecting payment for 30 days, or 15 days out, or if you are now carrying inventory. So if you're selling a product, and maintaining inventory, you need to account for the the cost of those items that are potentially being sold later down the road, you know, month later or such, those are situations that you would need to use accrual accounting versus cash.
Collin 29:17
I'm glad that you talked about the products because I know many people jumped into the product world once COVID Hit are still trying to do that with things either they make or they're reselling. And so it's a reminder that not just do you have to go through and get maybe different licenses or start collecting sales tax and things but the whole basis of your business accounting may have to change if that's where your business starts to head.
Anne-Marie K. 29:41
Exactly. And that's that's a piece of the puzzle a lot of people aren't really familiar with. With that. It's just such a small little change that has to happen that has really big implications on your numbers. For example, because you could be purchasing inventory or materials To make a product such as the leash or a collar in January, but you may not actually sell the end product until later in the year such as July, August, September, depending on how your sales are set up, and you need to account for that difference in time for when you have accrued the expense and then collected payment on the product.
Collin 30:26
Is there a percentage that we would look for as far as business accounting to go okay, now it's time to switch. Let's say I just made my first leash and I bought the products, I'm going to sell it, does that mean I now need to make that switch immediately to accrual? Or do I need to wait until it makes up a higher percentage of my total business income and revenue?
Anne-Marie K. 30:49
I would double check with your CPA and accountant just to make sure. But my guess is it would need to be an immediate change. Because you really are changing sort of how you're collecting that money and spending your money right away as soon as you're buying materials and product.
Collin 31:04
Yeah, I think that's so important that we as the business owners have to remember that yeah, decisions are easy to make, right? We can make whatever decisions we want. But now there may there are always implications for those decisions. And we've got to sit and go, Okay, now, now that I've done this, what am I legally obligated to do and all that, and financially responsible for?
Anne-Marie K. 31:26
Absolutely, and it's one of the biggest benefits of having team members that you can reach out to and get the best advice from, whether it's a business consultant, or a financial consultant, or a CPA. I mean, those people have tremendous value, not just in the one time that you use their services for tax preparation, but it building a relationship and consulting with them on these big changes to your business.
Collin 31:54
Again, it's about mindset. And, and really, I think for that kind of decision, it's, it's it's possibly running both of them and really saying, how is my business operating? What's going to optimize this, but also, what's something that I'm gonna be able to stick to, as the business owner for this is a hat that I'm choosing to wear of like, which can I actively keep up with as well?
Anne-Marie K. 32:13
Absolutely. And you talked about mindset. So I do think that at some point, you're going to choose one or the other, because it does kind of rely on how you see your business and how you operate your business. If you are forward thinking if you are looking at if you have lots of bills that need to be paid for your business, you know, on terms like net 30 terms or things like that, then you're going to want to know what you owe throughout the year. Most pet sitters don't run that way, we just don't have a lot of expenses that we're paying on credit for them. And a lot of clientele is is paying pretty close to when the invoicing is done. So the I think they are different enough in the way that you have to think about your business that you're going to eventually find that you choose one or the other to do
Collin 33:03
well. So let's walk through an example. And this will be be fun to do in an audio program. But just everyone, break out your pen and paper getting into the Excel spreadsheet, open QuickBooks, let's do this now. Just from your, from your perspective, a summary of let's say, my business pulls in $100. What from your mindset and how you think about this, what walk us through what happens to that $100 As it comes into our business and in ways that we need to make sure that we account for it? Because I know, I know, personally that I get $100. But I don't actually get $100, right? That's right.
Anne-Marie K. 33:42
And this may be a little hard to hear for some people, because we don't actually keep quite a bit of that $100 unless you are really good with your expenses. But first thing we need to know is what did it cost us to get that $100? Did we pay any advertising? Did we pay an employee to do the service? Did we have to buy any supplies for us to complete it? Those are all expenses that come out of the money that we make. First and foremost. Then we have to talk about taxes. self employment taxes, because, you know, some people are used to getting a paycheck every every week, when you're self employed. We don't take taxes out of your paychecks, we have to pay that at the end of the year, or we're paying it multiple times, you know, prepaying it through the year, but you have to assume that some taxes come out of that $100 Usually it's anywhere between 20 and 30% has to go towards taxes. So setting that aside, and then you have to pay yourself I mean, what's the amount that you get to keep or want to keep out of that? $100 So you need to I think you proactively need to know that At number, what your profit should be and how much you want to pay yourself out of each $100. I very much like the Profit First mentality it's a book written by Mike McCalla wits. Fantastic author, fantastic premise to flipping the idea that I think a lot of business owners think we pay expenses first. And then we get to pay ourselves out of whatever is leftover. And the Profit First mentality says, Nope, I want to decide how much I want to make first. And I take that out first, and then whatever I have leftover has to pay for my expenses. And we budget those at the end afterwards. And so I think that that's a good shift that a lot of small business owners need to make for their business to be profitable for them, or to happen. So that's kind of a long, roundabout, answer to your question of $100. How do we determine what we get to keep so take out your profit first, then determine what your expenses are for that, and then take out your taxes. From there.
Collin 36:10
I think it is important to note that when you hear oh, take out profit first. That's not just a magical number that we get to come up with. Right, there are limitations, there are strictures that are placed on that, given some of the things that we as you mentioned earlier of going, okay, it cost me something to make that $100. So, I do have to budget for that and give a hard look at that. And this really hits the road, when you realize I'm going Oh, um, I'm going to charge $100 for this service. But oh, it actually cost me, you know, $80 To do that, because I had to buy that new equipment. I did all that drive time back and forth. And I had to buy some more supplies, right? And you're like, Okay, well, I didn't actually that that's actually not as powerful as I thought it was. Because then I still have taxes. And on top of that, and everything else. So you end up in a spot where once you when you do this, you see really exactly how much you are able to take home, because there's that two of going okay, how much do I want to versus how much am I able to? And how do I make those match? And that's that process of budgeting and refining?
Anne-Marie K. 37:11
Yeah, absolutely. I mean, this is the puzzle piece that I love with it. You know, it's, it's, it sounds like a complicated math problem. And to a degree it is. But when you start to track your numbers, and you start to understand your business, and where your money is going, you are able to drill down into some of those more specific questions about what can I afford? How much can I do? And where am I going to be in a couple of months, or even a couple of years down the road to make even bigger choices about where my business goes?
Collin 37:46
One of the aspects of that of how much it costs us to get that $100 was, you know, the client acquisition for that client, and that one I know can be also pretty nebulous, because let's say, you know, I throw 200 bucks at a Facebook ad. How do I how do I start accounting for the clientele that come from that so I can put $1 figure on that. So I make sure that that goes into my budget for next time?
Anne-Marie K. 38:11
Absolutely. So being able to track where your clients come from, if we're talking about an advertising and marketing program with your business and being able to track those expenses that come with it. I think the key piece is being able to capture that information when a new client comes to you, when you first have a conversation with them about your services is to know how did they find you? Where did they come from? Was it somebody that you met on the street and handed a business card? Or was it somebody who saw you on Facebook or Instagram social media, and that can really dictate again, where you choose to spend your money. If you've got 90 out of 100 clients coming from Facebook, I'm not going to spend my money on print media, you know, sales flyers, it's going to be on Facebook ads, because I know those numbers, I've tracked it. I've captured that information as it comes in.
Collin 39:09
Yeah. So what we're doing here is we're going okay, I'm going to spend $100 on Facebook ads. And the first person that comes to me that says they found me through a Facebook ad, tactically, I guess that was $100 for that first client, right? But But then the second client that comes up, okay, that was $50 for that client, and then the third, and we're just taking the 100 divided by how many clients we get from that over a set period of time so we can really understand the reach that that had. And this is where you can start to see as a business owner going okay, well, the $100 that got me 300 clients. Wow, that was a really good ad spend. But man, I paid $5,000 For that billboard, and I got one, right like, Okay, well, the five that $5,000 client, you're better, you better make sure that would last you for 30 years.
Anne-Marie K. 39:54
Right? Absolutely. You know, and the other side of that is tracking how much that client brings in for you to Like, that's the other half of that puzzle. So you spent X dollars to get them. If they use you once, they're not a very valuable client. But if they stay with you over the next five years, and they use you, you know, six to 10 times a year, that's a valuable client that you've gained through, hopefully, not so much.
Collin 40:17
Well, I guess that that becomes a column in the spreadsheet of how they found you. Because then what you can do is you can break that out and go, okay, my Facebook clients tend to spend this average dollar with me. So then I can start getting the average cost to acquire and the average revenue that that person brings to me, and you can start comparing and go, Okay, well, this ad spend is a bit higher per client, but they spend 1.3 times the amount that the lower ads do because of how they reach to the demographic that that's getting to, that's worth it for me to pay a little bit more, because I get a little bit more from that. And now we started making some super powerful decisions on where we direct those our precious dollars to go work for us.
Anne-Marie K. 40:59
Yeah, absolutely. I mean, I mean, just in that one example, you can see the power that those numbers bring to you and being able to make those informed decisions.
Collin 41:09
Now, one of your services that you offer is something called a historical cleanup. And I am curious about what this is and what this looks like for business.
Anne-Marie K. 41:19
Sure. So let me start by saying, bookkeeping, in general, is the accurate financial records of your business. So it's making sure that we account for all your income, all of your expenses, all of your liabilities, and the investment you have in your business. In a very brief nutshell, what it has what my monthly bookkeeping looks like, is just categorizing transactions each month reconciling against your bank account, and preparing financial reports and doing some advising with each client. And historical cleanup is looking at past data, not current. So an example would be either somebody who's had done no bookkeeping, they don't have any system in place. And we need to build their system for a set amount of time, whether it's the year prior, or it could be just a couple, if we're starting in June, maybe we need to build up what January and June looked like prior to where we begin. So that historical cleanup is really collecting all of the financial information that you can provide your bank statements, your credit card statements, expense receipts, things like that. And we build a financial set of books for you from that. It can also mean somebody who has an accounting system, but maybe either hasn't kept up with it on a regular basis, or they have some errors in there that we need to clean up so that their books are as accurate and fresh as they can be for you. Well, that's
Collin 42:50
important to know if somebody who's going okay, I'm just, I'm just starting, I'm just interested in this thing about bookkeeping or accounting, I haven't really been doing a good job about this, to understand that. We can sit down with existing data, existing bank statements, existing receipts, and all of that, and build that. And so we don't have to go okay, well, the past seven years or last, I guess I just have to start from right now moving forward, going no, now there is a way to capture this so that you can get this look back data so that you can get as accurate as possible. So you don't have to wait any longer.
Anne-Marie K. 43:27
Absolutely, and and if you want your books to be that accurate, it's important that your past data is as cleaned up as it possibly can. I mean, there, you can, if everything is really messed up, or you really don't have the data to build that information, if we no longer have receipts, if we don't have access to bank records or statements for any reason whatsoever. We can start fresh today. And just move forward. I mean, there is a benefit to just say, regardless of where I'm at now, I'm going to do better going forward and keep that forward motion going. But a lot of people will need an historical cleanup because they need tax information to file their taxes in April. So they need 2022 cleaned up and ready to go. So that's definitely something that we can do. And I recommend having back past data cleaned up if we can first. Right, right
Collin 44:26
now, if somebody is interested in in starting now, what are some numbers that we really need to be paying just close attention to if somebody's just dipping their toe into this and isn't ready for a big historical look up but they just want to start getting capturing some information right now.
Anne-Marie K. 44:42
Absolutely. So first tips that I have are to separate personal and business finances as best you can. Because that's going to be the easiest way for you to pull and track business information. Things that you want to know is is is to be able to track how much income you're making. If you have multiple streams of income if you have multiple businesses that are tied together, um, like we see pet sitters who also make collars and leashes, so they have a, you know, a store component, a commerce side to it, we want to be able to track all of that data, all of that income together. We also want to track all of your expenses, anything that relates to your business, growing your business, making your business work, needs to be tracked with receipts, and entries for those expenses as well. When we talk about commingling income, that's someone who spends all of their business income to a personal bank account, or spends business money for personal expenses, that can really muddy the waters when you want to look at what your business is doing, how much you're making, and what you can afford to do with your business. So my first piece of advice to anybody coming to me is to make sure that you're separating those two pieces for yourself. So whether you have a business bank account that is separate from your personal and all of your business income goes into there, or you have a business credit card that you use for expenses.
Collin 46:10
Well, is that really a concern for for tax purposes, or for business decision purposes or for both?
Anne-Marie K. 46:19
A little bit for both, I'd say it's more for your business decision making. And when you're talking about having someone else help you with your numbers, there is a privacy concern with having your personal finances mixed with your business, it makes it difficult to share some of that information. But in general, it's really difficult for you to see your numbers and to keep track of them. When it's mixed in with everything else from day to day activity. It's hard for you to know how much he brought in specifically, because you need specific numbers, you need to be able to tie these numbers to decisions you're going to make.
Collin 46:59
And that's the important part of it. There's there's this tying it to decisions. I love how you put that because that is what we're basically boiling this down to have going well, I decided to buy that or I decided to plan for something. How can I plan for that? And I want to dive into that here just a minute. But going all these are decisions whether to spend or to save. And I need to be able to tie those together. And if you're scrolling through and going well, no, that was that was eggs for that breakfast, and oh no, there's where I bought the leash. And that's over here. And well, those are the shoes and this is that was my electricity bill and all of a sudden not just physically cluttered, but now mentally cluttered as well of we're trying to just tease that apart. So I'm having a nice separation of going. I know when I log into this account, and I'm looking at this spreadsheet, it's only this and I can be really laser focused versus the personal budget, which is still important, right? Everybody do a personal budget, like that's necessary. But you need to make decisions separately between business and your personal side.
Anne-Marie K. 47:58
Absolutely. And there's a mindset that when it's not pulled out separately, we lose track of it. We're not paying attention to it in and I think anybody who has struggled with a spending habit knows that feeling that it's hard to know what you've spent if you're not looking at those numbers on a regular basis to see how you're doing. Yeah, like I just feel like you can't make adjustments without knowing where you're at.
Collin 48:26
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Anne-Marie K. 49:41
So there's lots of variables that can occur with that. The first is to know whether or not your company is profitable. Are you making money or are you losing money? Do you know what your net income in is and net income is? Your full income minus your expenses so what's left over after your business operates? Then you need to know how much you're taking out for yourself from that net income, what are you removing from the business? For your own expenses, your own paychecks, so to speak? And is there any leftover funds after that? Is your business growing? Like, are you? Are you? Is your business shrinking? Are you losing clients and reducing your income month over month? Or are you continuing to grow and have more room? These are all questions that we ask from the beginning. Knowing your profit margins is another key piece to this. So knowing per service that you provide, and what you're spending to perform that service. Is there money leftover. So that's a very granular look at your numbers, that's hard to determine if you're just doing this by feel, if you're guessing at it, because when you bring on new employees, there is an upfront expense to that, whether it's the job ads that you're paying for the amount of time that you're paying them to train a new employee, so whether or not actually bringing in, you know, service money for you, you're just spending that time to get them up to speed, all of that takes into account, do you have that in your budget, your business budget to afford that front end expense before they start earning money for you?
Collin 51:25
Right? And that's something that we have to have budgeted for. Right? And no, okay, I know, every time I bring an employee, it's $300, it's $500, once I pay for the, you know, access to the software, and their insurance, and their training and the equipment that I'm getting them and building that out, and then just looking okay, because I what we do is okay, I'm gonna spend that on this person. The next question for us is always, how many? How many visits does that person have to do to pay off that initial investment and then start, you know, making it profitable for the company, and you, but that comes into the growth of the business too. And I think another important question is to really ask, what's the purpose of this employee, right is, are they to replace me? Or are they to complement me and help me expand in addition to the work that I'm investing, because that's, that's kind of a different equation to know, okay, if they're trying to replace me entirely, well, that's, you know, I know, I'm gonna have to have a lot more work, or they're gonna have to be a lot more, you know, cost or price increases associated with that.
Anne-Marie K. 52:26
Absolutely. So a business owner who works out in the field sort of supplements or subsidizes their employees, the return on an employee's work, because you're not paying out hourly wages for the work that you're performing. So when you look at what an employee cost you, and what you're paying out for that versus the income that they're bringing in, it can get a little bit skewed when you're in the field and doing that. So when you talk about taking yourself out, you think about all of the work that the business owner does. And there's no true, there's some cost to it, but not for an employee cost with that amount of work. And so you're automatically taking out sometimes as much as 40, or 60% of that income that you're providing, with a new employee that comes in with all the costs associated with them. So you have to be able to afford that. Going straight into it. If you're pulling yourself out, if you're already out of the business, it's a little bit easier equation to know how you're doing. But for someone who's growing their business and trying to to pull themselves out of it can get a comp become a complicated question to ask and look at,
Collin 53:38
it really can't to know what you're comfortable with. Right? How much of it? How much of a hit can you take to that income to dedicate to this new person that you're bringing on? But recognizing that the cost of having them is the cost for is an opportunity cost to grow the business and actually make more revenue at the end of the day?
Anne-Marie K. 54:00
Yes, absolutely. And one other piece that I want to make is that I make it sound like this is an absolute numbers decision that's black and white, hard and fast. And it's not. There is still a lot of variables that play into this. And there's some leap of faith that has to happen when we make some of these decisions. But when we track what is happening with our numbers when we look at, okay, this is what we hope is going to happen. And then these are the actual numbers that occurred. Do they match? Do they do they line up to where I want them to be? Or are there further adjustments that we need to make whether it's reducing costs, changing our pricing model for our business, to accommodate for employees, or whatever it is that you're adding to your business? It is very much a back and forth. thing that happens it's not yes, we make this decision. Yes, we know it's going to work. It might not. We may have to adjust as we go on but we don't know that unless we're tracking Again, those numbers.
Collin 55:02
Well, right, because I mean, as you, as you talked about your experience in North Carolina, when you had this, what almost doubling of the business, but over the course of two years, like tracking and seeing that kind of business growth, you know, going, Oh, if my business doubles, again, I can't double myself again, right. Or I might not want to write getting this, it's not a numbers thing, it's going bad, I don't want to be in the field that much, or I'd rather be dedicated to this thing. So if we experienced this double, well, that would be more than enough to hire two other people part time to come on, and take on those visits, so that I could do and focus on these other aspects of the business. So then there's this, in addition to the revenue planning, there's now going what, how do I see myself as the business owner in this and what roles do I want to play? And how do I link those with with my hiring and my growth decisions?
Anne-Marie K. 55:57
Absolutely. You know, we need to think about, again, I think you mentioned before, knowing what you want out of your business, what your goals are for yourself, as the business owner, why are you putting in all of this work, and that really dictates kind of where your business grows for you. I mean, there are some business owners out there that that don't want to grow, that are very comfortable with their business where it is. And that's enough for them. And then there are other business owners who absolutely don't want to be in the field, they want to manage from behind the scenes and grow as big as they possibly can in their area. And there's room for everybody in this industry for that. So knowing that piece of the puzzle really can dictate a lot of how you how you plan for your business to
Collin 56:48
because apart from desiring to grow, or hire people, as we've seen in the past year and change, prices certainly do go up, right cost of living doesn't change, well, it does change goes up. And I should say, we, we need to be we need to be what we need to be accounting for those. And we need to be knowing our numbers to knowing if we're still okay to know, okay, you know, you know, let's say I decide I'm going to take 30% of whatever comes in, that's going to be funneled to me and the rest goes to my business. Well, is that still going to be okay, there's 30% of $25 30% of $100. Still, okay, three years from now? Or do I need to either take a larger increase of the percent or 20 raise my prices, so I can keep up with this as well and figuring out how we need to modulate that as the business owner. So we can keep up with with just price and cost of living increases as well.
Anne-Marie K. 57:42
Absolutely. And we're seeing a huge change in wage rates for employees. So if that's a process that you're going, I mean, that's that's a big conversation that's happening right now, in our landscape that will significantly can significantly impact your choices that you make on hiring
Collin 58:05
and growing. Yeah, to know, wow, like everybody needs, everybody's wanting, you know, 1516 $18 an hour, given my numbers, I can't pay that and then still have money left over to pay my personal bills at this time. So how do I walk through that? What does that look like for me? How do I raise prices? How do I increase business revenue to make that work? And then that's where the strategic planning comes in to reach for that goal?
Anne-Marie K. 58:31
Yeah, absolutely. And that's where your numbers matter of being able to know what you're spending where what percentages are being taken out for things. Because it's, it's nothing is static in entrepreneurship, and business ownership, it always there is always something that is changing and adjusting. Whether it's something out in the field in the world, or whether it's the numbers behind the books,
Collin 58:56
in those books. I know one of the one of the most fundamental aspects of accounting and bookkeeping is a profit and loss statement. But this is yet another thing where it looks like witchcraft and wizardry to a lot of people. So walk us through what that is in really how to read it and use it.
Anne-Marie K. 59:14
Absolutely. So a profit and loss statement is truly a depiction of all of your income for a period of time. And all of the expenses that you have have had come through your business. And so it's a it's a math equation, we have income on the top, minus all of your expenses. And at the bottom, it gives you your net income. This is the the amount that is left over after everything that you've spent money on. And we can look at that for a year. We can look at that for a month. It is a period of time sort of a snapshot of what your business look like.
Collin 59:52
How do we use these in decision making because people may go Okay, great. Well, I know how much I have leftover I guess that comes to me like What is that? What are some ways that this can actually influence my decisions.
Anne-Marie K. 1:00:04
So this is going to be where you build your budget for your business, knowing what you're spending your money on knowing your expenses. As they come and go out of your business. Some things that are very regular expenses, some things happen once a year, knowing where they fall, month to month, will really help you judge where you can have further expenses, or where you need to budget just to know that something is coming up. I think most people are familiar with building a personal budget, and a piano. But Profit and Loss is very similar to that where we're looking at, again, where all of your money comes from all of your income from your sales, your services that you're out there. And knowing whether you have lean months, months, where you may be bringing in a lot less. We all know that petsitting is cyclical, we see a a huge bump in service sales in the summertime, around holidays, less so in our colder months when people travel a little bit less. And so knowing the ebbs and flows of your income, and the ebbs and flows of your expenses, will help you project what you can do in the future.
Collin 1:01:20
Alright, so that on those those months that are, they're doing really well, we're not taking everything out of that, because we have to set some aside for those lean months. Because you know, I It has happened, I know, you know, maybe it's when you signed up for your insurance or when you know your software bill is due, but if those fall in a particularly lean month, and it's always lean, but now you've got insurance and software both do that same month, that money has to come from somewhere, and it needs to come from the previous months, that we're now setting aside to allocate for that time period where we know while this month, I have a lot of expenses, and my income is always low. So that means I'm preparing for that little by little each month to get ready for that.
Anne-Marie K. 1:02:01
Exactly. You know, big things that we see are maybe yearly insurance premiums that need to be paid once a year. And those are usually a good chunk of change. And so knowing when you plan that some of us have a choice of when we start a new premium plan to have it happen in a good month. But a lot of times we don't, it's whenever we sign up for the service. And there are things like that that can happen and can really put you out of whack if you're not prepared and looking ahead for them.
Collin 1:02:32
Right, because then you can start comparing month to month and now you can start getting some of these growth trajectories as well, for both growth trajectories for both income and expenses. Right? Because you can go man, this may mean I spent a lot this May in last month I didn't spit or last May I didn't spend a whole lot then i What happened in the interim time.
Anne-Marie K. 1:02:50
Absolutely. And to your point, being able to compare not just April to May, but may of 2022 to May of 2023 is super important for those numbers, too. Because our business is cyclical in that, you know, month over month may be normal for your business. But what you did last year compared to this year, is sometimes a better comparison to look at because of the seasonal nature that we experience. But yes, being able to, like you may know that you were busy. But how come you only saved, you know, $250 at the end of the month, like where did it all go to? Why was this month so much leaner than times previously? If you're tracking those numbers, you can look back and see oh, well, we had, you know, something catastrophic happened. And we didn't plan for that, you know, surprised us, or our spending got, we bought all of the treats for all of the dogs or client gifts. Like that's another big one that I think a lot of people don't really necessarily know what they're giving back to their clients in a financial sense.
Collin 1:04:00
I know for us sometimes it's the oh, well, we were approached with a really good advertising opportunity where we didn't know about the downtown dog run the last year, but we did know about it this year. And that's when we bought our booth and table when we sponsor the the lineup or whatever. And that's, that's why we spent more this year but but you know, you have to know that because Okay, well, then, again, we go circle all the way back to Okay, well, I spent $500 on that booth and table and sponsor. Did I get anything from from that? And now I can look back and okay, maybe I don't need to budget $500 for that next year, because I'm not going to do that next year.
Anne-Marie K. 1:04:33
Exactly. Exactly. So you can you can make decisions on where where you spend those, those dollars, month over month or year over year for you.
Collin 1:04:44
I want to do want to talk about software and applications for us as the business owners because I know that there's a lot different options out there but I know QuickBooks is really, really popular for not just business owners, but a lot of accountants bookkeepers, CPAs they like having that integration So what are some some tips that you have or best practices for for QuickBooks? Or maybe what am I? What am I best option for using QuickBooks as a business owner?
Anne-Marie K. 1:05:08
Absolutely. So QuickBooks is the one that most people are familiar with. I think it has something like 70% of the market share here in the United States. Zero and wave are two other options that are out there equally as good, just lesser known services for accounting software. With any software system that you set up, again, I'm gonna go back to my soapbox here and separating personal and business money is super important. At this stage, when you're deciding to integrate a new software system, you want to make sure that those monies are separate so that we are only looking at business money when we can otherwise it will get very complicated very quickly for you, in separating those those numbers out. With all new systems that you put into place, make it a habit, make it routine, have it be something that you're looking at regularly. For me, when I started my business Sunday afternoons were my quiet time at home with not a lot of family obligations. So Sunday afternoons became the time when I would send invoices to my clients reconcile payments. Look at my income. If I was using QuickBooks, which I did very early on it was categorizing transactions dictating when an expense came through my bank account. What did it go towards? What expense account? Was it? So was it an advertising cost? Was it an insurance cost? Was it supplies that I purchased for the business, so making those transactions and doing it on a weekly basis, keeps that time commitment down, you're only doing a little bit of work when you let it go? week over week or even month over month, it becomes a huge task to tackle for you. And a lot of people can shy away from that because it's not fun to do. Sometimes there's an emotional component to looking at your financial numbers with your business that you're making your face.
Collin 1:07:08
It is because sometimes when we're when we're in, we're operating, we're looking, we're buying we're doing things we're reacting, and then we sit down and we see sometimes the literal damage that we have done, right? Maybe we saw maybe it's just because Oh, wow, I saw a really good photo pack that came through, you know, I bought, you know, $100 worth of stock photos that I can use and oh, and was also Oh, it was I had all these good deals. And it was you know, we rather impulsive that. And then we look and we do that categorization process of assigning and looking and going, Oh, wow, that's, I shouldn't have done that. Right? Or maybe it becomes overwhelming because we have waited an entire month. And now not only is it overwhelming, because there's lots of columns and lots of rows. But now I've got to remember and I'm stressed about what's going on. And I just I can't even look at this. I just I'll do this later, right?
Anne-Marie K. 1:07:55
Yeah, that happens. Yep. It does. I mean, it happens in our personal lives. So it's, of course going to happen in our business lives as well. And there's nothing unique about that, I find that with a lot of my clients that you have that emotional component to doing it. So I think setting a routine, knowing what tasks need to be accomplished on a weekly basis. On a monthly basis. Maybe you're looking at something on a quarterly basis, because you need to make decisions that are a little bit more long term, or an annual basis when you're such as tax time when you're compiling everything at the end. So knowing what those task lists are, for each piece of the puzzle and breaking it up into smaller digestor bits definitely helps. Like you said, doing it on a weekly basis keeps that the amount of work that needs to be done into a smaller chunk that that is more manageable for you.
Collin 1:08:49
And we've talked about a lot of this in the context of making it manageable for us. But how do we know when it's time for me to go? You know what I need? I need help with this. How do we work through that decision
Anne-Marie K. 1:09:00
process? It every day. From my perspective, I'm a firm believer in outsourcing work that either you don't have the time or energy to accomplish yourself that you may not have the knowledge to do effectively, or you simply dislike the actual work. I have as an example, I am not a marketing person. It is one thing that I absolutely dread having to do each week creating social media content and putting it out there. So I very quickly realized that there was a financial component to me, benefit to paying someone else to do it, because I simply did not like it. It dragged me down each week. So I think if you're at that point with your finances, that it's an essential piece that you can delegate out to it. So again, not having the knowledge, the time, the energy or the desire to do it is a good place to seek help at as entrepreneurs they will absolutely come a time when you can't juggle all of the pieces, if you have to start deciding how you're going to delegate some of the day to day work of running your business happens, the first piece of that is when we hire an employee, we don't want to be out there doing all of the work all of the time. The second piece may be hiring a manager or an office staff to do bookkeeping. And accounting is not a unique in that sense. I mean, I think there will always be people who need to outsource that piece of the puzzle for any number of reasons for it. So I think when you start to feel like you're struggling with it, and this is no longer the piece that you want to do, or can do, is the right time for you to start looking for help. And it's always going to be before October, November time. Because that's when we're gearing up for tax season to happen. And January is a big piece of that puzzle. So always engage your bookkeeper before their busy time between October and February. Right.
Collin 1:10:59
Right. And so when it when it comes to that, what kind of things do I need to be giving my my CPA, my tax accountant to make that easier on them come come tax time.
Anne-Marie K. 1:11:10
So most CPAs are going to ask you for a p&l, that Profit and Loss report that we were talking about earlier, that's going to show your total income for the year, January through December, as well as your total expenses, that we're going to subtract that and get you that net income piece of the puzzle for your numbers, that's going to help them immensely. Some CPAs, will ask for a balance sheet. And I know that that's a scary term to use that most people don't understand. But a balance sheet very quickly shows you what you owe to other people what you own in your business, and what you have currently for that, and that's going to be a part of the puzzle for your tax accountant to do that. Most of the time, you're going to be presenting this information anywhere between January and April 15. So the better your books are ahead of time, the easier that process is going to be for you. So if you haven't kept up with your books, for the year prior January to April is going to be a little bit of a stressful time for you. If you've kept your books clean and up to date, come January, you're you're a lot more prepared for things and you can get it off your plate sooner.
Collin 1:12:28
Well, and you're not going to and let's be very real like yes, you may be slammed in an operating with this, but your CPA, your tax count are also going to be slammed at this time. So almost as a not almost but as a courtesy to them to make their lives as easy as possible so that you you don't get those stressed out angry phone calls going. What the heck's going on with this? We're just going to make that as smooth as possible for everybody involved. It's just it's a that's a best practice. I think everybody can get behind.
Anne-Marie K. 1:12:57
Yes, absolutely. You know, I mean, it's like all things just staying organized and on top of it makes for an easier process as you go forward.
Collin 1:13:05
Anne Marie, I want to thank you so much for sharing with us your story of your business, your lessons that you've learned and how you're applying that to numbers and encouraging us to get to know ours better and take some time out of our days to just start looking at these to make better decisions. I do know that there is a lot involved in this and that this is a rather large topic and kind of important for running a good business. So if people are interested in finding out more information getting connected with you and picking your brain, how best can they do that?
Anne-Marie K. 1:13:35
Absolutely. So first, thank you for having me. today. It's been just a real pleasure to be here and talk about this. This is a true passion of mine, so I can go on for hours on it. But I've enjoyed our time today. People can reach out to with my website at Tiny paws bookkeeping.com. They can also email me at Anne Marie a nn e Ma Ri e at Tiny paws bookkeeping.com. We are on Facebook, Instagram and LinkedIn. So you can find us just about any of those places. Cool. Well, I'll have
Collin 1:14:07
all those links in the show notes and on the website for people to click to again, Emery, I want to thank you. This has been very enlightening and kind of hopefully an encouragement to others not another dread cloud over the head to to do something and to start working on this.
Anne-Marie K. 1:14:22
Absolutely all of my clients have come to me at the same place, which is a place where they feel overwhelmed with what they've got to do. So it is it is something that we're familiar with. Um, it's something that everybody goes through, not unique, and we are always happy to help.
Collin 1:14:36
Well, thank you very much again, Emory. I really, really appreciate your time today. Have a great day. Numbers are everything when it comes to running a business. Yes, we have a passion for pets and a passion for serving others but the only way that we're able to do that on a consistent basis and execute well every single time is if we can financially show up to do that. We can try I'd run our businesses on our passions, but eventually we'll need to buy food. Just plain and simple. If you are feeling overwhelmed with your numbers, take a big breath, look at them and recognize that it is no condemnation over what you did or didn't do in the past, but you are where you are right now. And that's what matters, how you move forward. And the decisions from this point on will help set you up for success. I want to thank today's sponsor is tied to pet and pet perennials for making today's show possible. And we really want to thank you so so much for listening. We can't tell you how much it means. We hope you have a wonderful rest of your weekend. We'll be back again soon.
