Amy Bett Co-Founder of Drink Melo and Profit First Professional on how to manage your business cash flow and how she personally came to understand its vital importance.

[00:00:00] Hi, it's Michael Kerr here presenting Small Business Bantar.

[00:00:10] A healthy micro and small business sector means a successful economy and a more vibrant society.

[00:00:17] Small business boundary is about helping regional business owners better prepare for current

[00:00:22] challenges but also for the next stage of business success that I'll get into the topic in a minute but let me talk about it now it's going to be about how to manage cash flow better and it's never been a better time for a business owners to think about that so my own cash flow. I went from having a multi-million dollar budget at the Cotton on Group where money was there and available to fruitstrapping this business. But not only that, it was the extra layers of taxation

[00:03:00] and what you charged for your services

[00:03:02] and how much to pay yourself and all the things

[00:03:06] that you don't really think about kind of what's back the journey? Yeah, like there's, that's so, when it comes from that place where, you know, like a combination of you've got to take responsibility and, you know, be the, and earn revenue and also to learn from those experiences is, capitalise on that now by, you know, advising other owners

[00:04:23] and we're all, we're all up for But it now, I guess the book really took off and a lot of people resonated with the method. But you know what it's like when you read a book and you don't necessarily apply all of the methods or there's something that doesn't resonate and so you give up and you don't actually go and implement it. Well, Mike saw the need to have profit

[00:05:43] first professionals that would help business owners to talk about the high level components? Like I'm guessing that, oh yeah, you, I won't guess. You tell us about the high level components, please. Yeah, sure. So the way that I break it down, I like to explain it is there's a couple of different elements of what you need to do as a business owner

[00:07:00] to have, you know, a healthy financial business,

[00:07:03] but that clarity of finances.

[00:07:06] And the first thing is to really understand quickly literally break down any business and understand their overarching financial health. I know their numbers in 20 minutes. And I teach business owners how to download the reports, export it to a Google sheet, understand their averages in like 15 or 20 minutes. It's not hard, but people just don't know how to do it. And they think that it's true above their head, but they just haven't been given the simple process.

[00:08:22] Yeah, something that I the hands of their bookkeeper to tell them at the end of the month or something if they've made any profit or what's going on. I used to be in that way myself. I had no idea how we were performing. And now that I see how easy it is, I'm like, it's a crime not to actually take the responsibility

[00:09:43] of your business.

[00:09:44] Your bookkeeper isn't the one that's spending the money at the end of the day and they're

[00:09:46] not making the profit. And so it's this false sense

[00:11:00] of security and they think that they're more owners pay and operating expenses. So we actually separate up using average percentages because another barrier is people don't really

[00:12:23] understand how they're performing because their cash start there. That's one barrier. The other barrier is people think that they're going to have to do a lot of extra accounting or bookkeeping work by having multiple accounts, and that's just not the case either. It's really only an additional internal transfers that you do.

[00:13:44] So when you're transferring from your income all it's more about, you know, getting in there and taking action and setting it up the best way that you can with those numbers. And then you can just adjust it, you know, adjust those percentages up

[00:15:00] and down every week until it really is working for you. And then you've really

[00:15:04] you're off to, you know, you're off to a flying start.

[00:16:01] whether or not you've got, you know, you're paying too much in expenses

[00:16:03] or you're just not bringing enough revenue to begin with

[00:16:05] or you see where that bottleneck is.

[00:16:07] And that's the clarity that most business owners don't have.

[00:16:10] But then guess what?

[00:16:11] Once you've got the clarity, you can fix it.

[00:16:13] Yep, yep.

[00:16:14] Yeah, very illuminating.

[00:16:16] And it's a need to know sort of thing.

[00:16:20] What kind of, I don't just deal with or work with Amy?

[00:16:25] Funnily enough, I think it's a trap, or to keep finding more, keep growing to... But if you keep adding expenses and you just, you know, you're really going to ask the question what for and what... And more importantly, what are I really wanted out of my business and knowing what the numbers

[00:17:44] are is very helpful to making those kinds of decisions. It can be the owner's business, but when you break it down, it's actually three or four different types of businesses within one company structure or one trust structure. For them, it's their business. But when you say, really, that's wholesale, that's retail, that's servicing or something,

[00:19:00] and potentially, if you're getting really, I guess, service in your business. Yeah. And it's where, you know, we're a really good the minute, not just looking at your bank account as I said earlier, but certainly, you know having conversation with my coach in America and she was like have you ever heard of Carver? It's from the Pacific Islands and there's this tonic here and you drink it taste rubbish, but it gives you a similar effect Relaxes you it's not alcoholic. So you don't feel awful for stressed and busy mums and busy professionals who you know need a

[00:24:21] Release this is really good. Anyway, so it does it was like this fireworks moment for me to kind of take the principles of profit first and implement it into that business and really show people how I'm walking the talk and showing them how you can do it from a startup all the way through to a business that hopefully scales as well. Yeah and you mentioned in there you have a coach that you use who's based out of America so that's really told me just quickly about that. Yeah so I guess I've been doing a lot of stuff on personal development, professional development. So look, that's been excellent. We will in the notes put links to what we've thanks so much for that. Very practical and very helpful. Thank you so much, Michael. Love the chat. MUSIC So that is all for today's episode of Small Business Banta.

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[00:27:05] and other small business owners and hearing their stories.

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