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[leoandvern]

How to find great contractors for your online business: 5 steps

If you’ve been following along in our hiring series you’ve now reached the point where you are ready to hire, but now you’re wondering how to find great contractors for your online business. If you’ve missed our earlier lessons check out the following: Why you should hire a team for your small business: 5 great reasons What not to outsource in your online service business: 11 critical things What you should outsource first: the 5-step process to help As a brief reminder, thinking about how to find great contractors should be approached as a thoughtful and intentional process. You want to find the perfect fit and it is better to not hire at all than hire the wrong person just to get the work “done”. That's the whole reason why you want to know how to find great contractors right? Not just anyone but great! My 15+ years of financial and operational experience compels me to remind you that turnover costs your company a buttload of money! The more often you must do this because you didn’t know how to find great contractors, the more money you will waste. Turnover happens but it should NOT happen because you lack the skills necessary to hire effectively and know who you really need in the job.

How to find great contractors - Step 1: The job description

The secret for how to find great contractors starts with the job description. The main way that people fail at writing job descriptions is they write something general and broad. I find that women struggle with this most because they have been conditioned to not seem demanding or needy. But if you aren’t clear on what you’re looking for – the people applying for your job won’t be clear on whether the job is for them. You will lose out on great candidates who can’t picture themselves in the role and get applications from people with no standards who literally applies to everything. These are not the people you want. Your how to find great contractors job description must address the following things: - Company culture - Specific expectations about things you value (like attendance, responsiveness, quality, communication, etc.) - Specific deliverables - A timeframe for how many hours the person should expect to put in - Any personality items that are important to you I also feel compelled to remind you that you should not (nor are you legally allowed to) discriminate against someone based on race, age, gender, or religion.

How to find great contractors – Step 2: The job posting

Now you may think that the best practice when considering how to find great contractors is just to blanket job postings everywhere. I disagree strongly. Posting jobs on Facebook, Indeed and other places like that will get you a bunch of fluff and junk to sift through for maybe one great candidate. So how to find great contractors? Upwork. Upwork is a pool of people intentionally seeking contract work (not always true in other places) and provides several key features. First, you can see their ratings from other businesses that have hired them. Second, Upwork has protections in place for you as the hiring entity that you don’t have to pay if you don’t get your work. There is a screenshot captured work tracking, and weekly time tracking with time limits so you can keep costs under control. It’s a great place to find hourly help and you WANT hourly help. Why do you want hourly? Because you are test driving (which we’ll get to in a minute). You want to really know if the job description you made is correct, the scope of work is right, the time scope is on point and the person is worth it. Hourly work allows all that without a long-term commitment. So, post your job description on Upwork and see what kind of applicants you get. If you need inspiration for how to write your post do some searching on Upwork for how others are titling and tagging their job descriptions and see what kind of traffic they are getting. You don’t need a million applicants, but you want options. Upwork is basically a goldmine for those who want to know how to find great contractors.

How to find great contractors – Step 3: The Screening

Now, you’ve had some folks apply and it’s time to start screening. The screening process is one of the most overlooked components when business owners are thinking about how to find great contractors. But hiring is a lot like dating. It is a good idea to create a set of non-negotiables before you start the hiring process so that it’s easy to weed people out before you meet them. I will use my own business as an example, but you should create criteria for screening that matters to your business. Because really, while I'm giving you all kinds of advice no one can tell you how to find great contractors if you don't know what you're looking for. Since I own a financial firm, accuracy is one of the most important qualities I look for. I also look for people who are open to feedback and can follow sets of instructions that may contain multiple steps. Responsiveness is the last key attribute that I look for. I also don’t hire for experience as much as motivation. Why? You can’t make someone want to do a good job, but you can easily teach them how if doing a good job is naturally important to them. So, my how to find great contractors criteria are as follows: - Spelling and grammar must be correct – including capitalization – again, I’m looking for accuracy and attention to detail so if their resume is full of typos or they didn’t capitalize their own name (this has literally happened to me) I will not hire them - Did they answer my written questions in Upwork fully? I usually ask multi-part questions in Upwork to see if the person will pay enough attention to read the questions and address each part. This is my version of seeing whether they pay careful attention to all the words in the instructions. - Have they done something to advance themselves at each job they’ve had? I don’t care what job it is, have they done their best to excel? One of my best hires was at my corporate job and the gal I hired had no clinical experience at all. In fact, she worked in housekeeping. She was clearly very young and smart and could have been doing lots of things and most people would treat housekeeping like a job you shouldn’t try at. I mean, cleaning bedpans at the hospital is not glamorous by any means. On her previous review in that job, she was given a “Far exceeds expectations” which, after all my years at the company, I knew was hard to achieve. I immediately wanted to meet her because if someone gave their all at a thankless job like housekeeping, I wanted to see what she could do for me. I did hire her, and the recruiter said that this gal had been trying to get work in the clinical side of the company for two years, but no one would hire her without experience. Their loss, she was fantastic! After they pass this test, I give them a call or email and they have 24 hours to respond. If you are actively applying for jobs 24 hours is completely reasonable. We live in the age of cell phones and constant connection and there are few places you can go where you literally can’t respond to a call. This is the time to be strict, not give people grace. You WANT to screen people out here. You don’t want to start by cutting people slack, that always ends badly. They need to earn slack once you’ve hired them and you know they are great!

How to find great contractors – Step 4: The interview

After you’ve screened them, I recommend a two-step interview process. When you’re trying to determine how to find great contractors, you want to first start with a phone interview. Why? So that you can tell how they sound over the phone. It also gives you an opportunity to screen them again without seeing them. If someone sounds gruff or like someone who doesn’t fit with your idea of customer service, or the vibe is just off then you can simply not invite them back for a video interview. Have a few questions ready for the phone interview. I recommend ones like this: - Tell me a bit about yourself - Tell me what interested you about this position - How do you see this job fitting into your overall vision for your career These questions will help you assess them on a personal level, whether they have a clear understanding of what the job is and if they are even thinking about how this position fits into their long-term plans. This process again should screen some folks out. Because the key to knowing how to find great contractors is a stellar screening process. By the time you get down to video interviews, 2-3 candidates are ideal. If you already have a team, it’s a great idea to involve them in the video interview so that they can provide feedback about the fit of the new person into the team culture. Multiple sets of eyes and ears help weed out things that you may not notice but others will. The questions I like to ask in this interview center around the candidate giving me specific examples of how they’ve handled certain situations. It’s a challenging type of interview style but it works super well. I’ll give you some examples below but what I’m looking for is a specific example and if they say what they “would do” or give a general statement of how they “would” handle things then I know they didn’t really listen to the question. Some examples of these questions are: - Tell me about a time when you gave exceptional customer service - Tell me about a time when you had to solve a problem that you didn’t feel you had all the information to solve - Tell me about an experience you’ve had working with a diverse population - Tell me about a time you made a mistake, how did you find out about it and what happened - How do you actively manage your stress - Tell me about the best and worst boss you’ve ever had For the question that is “tell me about a time” you should get a specific story and it should have a happy ending – like it should all turn out well. I can’t tell you how many times I’ve asked those questions and in the end, the customer was still unhappy. That’s your customer service example? Pass! I ask about diversity because inclusion is important to my business, and I know it’s so much more than race or language (things people typically focus on). Finding out how they relay a story of them making a mistake is also very telling. I know that mistakes happen so if they say they’ve never made one. Red flag! If they made one, caught it, and then put a system into place to prevent it from happening again? Gold star. If they do not have an active strategy to manage stress – they need one. And lastly, I just like to hear them describe bosses because they have no idea what my management style is like and I will know which category they would put me in based on their description. Always complete all the interviews before you hire and be thoughtful about it. The key to knowing how to find great contractors is to take it slow and put them through a rigorous hiring process.

How to find great contractors – Step 5: The test drive

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[leoandvern]

When Should I Hire? 4 ways to tell you're ready financially

You hear about it all the time; your business besties are telling you that you shouldn’t be doing it all on your own, but you keep asking yourself “When should I hire? How do I know I’m ready?” This post will walk you through 4 steps to make sure your finances are ready to hire whether it’s a contractor or an employee.

When should I hire – Pre-work: Know what you’re outsourcing

I know, it seems obvious but I’m going to put it out there anyway because if you are trying to decide if it’s the right time to hire but you aren’t sure what tasks you even need to outsource… First – go read 11 things to Never Outsource Then – go read What you should outsource first: The 5-step process to help Now, have you read them? Like, really read them and done all the steps? Are you still asking yourself "when should I hire?" Great! Okay good. Now you’ve done your prework and you know what you’re outsourcing. Believe me, the reason so many hires go south is failure to address this pre-work. It WILL make or break you. Just sayin'.

When should I hire – Step 1: Know your budget

I know you probably want a magic number here but to give you one would be wrong. There IS no magic number because it all depends on your business, your goals, and what you’re hiring for. Hiring can be scary to even the fact that you are thinking and asking yourself "when should I hire?" is great! I’ll give you an example. I hired my first bookkeeping assistant when I was still at my day job 32 hours a week, maxed out on time but earning less than $3k a month in my business. Some people would say that’s crazy. Hiring her freed up my time to market, finish my website, attend to the higher needs of my clients to make sure they were super satisfied, and I doubled my revenue in just 4 months.  Could I have done that without hiring? Probably not because I had ZERO time to focus on any of the tasks that it took to grow my business. Hiring someone allowed me to make more money because I wasn’t in the day-to-day as much as in the CEO role. I also know people who are making 5-figure months who haven’t hired anyone because they just don’t feel the need. You see why the question "when should I hire?" is not simply a number thing? The reason your budget is important is that I don’t want you to OVERPAY for something that is not directly impacting your ability to reach your goals. Now if you don’t HAVE a business budget, then this is the time to start! In fact, I have created a supremely easy-to-use Business Budget template that will have your budget whipped out in no time! It does all the calculations for you AND it uses Profit First (which if you haven’t read you totally should it’s GOLD!) You can even snag it for $50 off it's normal price!

So how do you know what is the right amount? It depends on what else is in your budget. If you run super lean and have some extra money to play with while still keeping your operating costs under 40% then use that as an initial guide.

When should I hire – Step 2: Act as if

One of the frequent things I hear from folks is that they are nervous to add staff because they are worried about cash flow drying up. They don’t want to bring someone on and then have to let them go because business takes a turn. This is probably the biggest reason people wonder "When should I hire?" My advice? Act as if you have already hired someone for 2-3 months. That means setting aside their salary amount from your budget just as if you had paid someone (putting it in savings is perfect). Why does this help? One, it gets you used to seeing what your budget looks like without that money. Two, it provides a buffer now of pay for that person so that IF you have a bad month, you’re still golden on paying them their due. Remember, one bad month or two isn’t the end. You have to make multiple wrong decisions or fail to take multiple actions in a row in order for your business to actually fail. Like you have to IGNORE a whole heck of a lot of signs flat out for that to happen – and you wouldn’t do that – you would act at the first sign of trouble. So, stop stressing, and act as if for a few months to build up a safety net.

When should I hire – Step 3: Get SOPs and processes in place

Step 2 is actually a great time to be working on step 3. Because you should NOT hire before you have some kind of SOP (standard operating procedures) and processes in place so that the person you hire will have some kind of idea what the heck they’re doing! I know you're thinking, "Sarah, this has nothing to do with when should I hire?" But bear with me. I promise you will not believe how little you realize you’ve hacked together until you go to write an SOP. My favorite tools for this? Tango and Loom. Tango is a Chrome extension that you can use (For free) that will screen grab and actually make an SOP for you that you can then edit a bit and go! It saves hours and hours of time and will help so much! Loom is great for walking people through the SOP process in more of a “live” fashion Since some folks do better with written and some with video instructions my ultimate recommendation is to do both. Next up you need some kind of system for task delegation, review, and monitoring. Whether you use Notion, Asana, Monday, or Clickup you need something that will streamline where your hire can find their tasks, mark them completed, communicate to you any questions, etc. Plus, you want to build checkpoints on the processes as well. Now if that sounds supremely overwhelming, I have recommendations! (As always!) If you have no idea what system you need: you want Ariana Rodriguez If you want Clickup/Dubsado wizardry: you need Leann Forbes Getting this in place does take some time and that’s why using the 2-3 months you’re saving up some salary buffer is an ideal time while you are still doing the work to get all your processes documented and systems in place.

When should I hire – Step 4: Create your perfect hire criteria

Now, just like anything else, I want you to approach this thoughtfully and in advance. Don’t just throw out a task-based job description without knowing the type of person who would be a great fit for your company. Because we've now gotten past "when should I hire" and we've gotten closer to "who should I hire" plus you need to have this part nailed down before you start the hiring process. Take some time to answer these questions: - What kind of person do I work well with? - What kind of person has always irritated me to work with? - What are key work habits that this individual must have to be successful in my company? - Does the person need experience or am I willing to train them? - Are there any things that are 100% dealbreakers for me? Political, personal, behavioral? Really the world is your oyster, and no one is going to read this. If you know you won’t get along well with someone with opposing worldviews, don’t hire someone who has them. Or if they hold fundamental views that are different from the values of your company – it’s not about right or wrong – it’s about whether they are a good fit. Once you have really thought about your perfect fit criteria you can use that as a jumping-off point for your interview questions. This way you know that you are asking questions that help identify whether people are the perfect fit or not. I bet you had no idea this was going to be the route we would go when you first googled "when should I hire" but I promise you will be glad you did! When should I hire – Go forth! It’s time! You’ve figured out your budget, saved, gotten your SOP and processes together, and defined your perfect fit hire. No more wondering, "When should I hire?" Now you can get on to the business of hiring with confidence knowing that you have thoughtfully approached both the operational and the financial components of the hiring process.

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[leoandvern]

What You Should Outsource First: the 5-step process to help

I’m sure you’ve all seen posts or reels or heard from a coach about what you should outsource first. And chances are some of that advice was from people who offer services that you would outsource to – sketchy – or you’ve heard the old “hire a VA first” mantra – just don’t.Calling out the elephant in the room: Yes, I realize that I am a service provider telling you what to outsource first as well. However, I don’t think that everyone should hire me. This is why I plaster right on the front of my home page that if you aren’t yet pulling $5k months you do not need to hire me – and then give you free advice on how to manage your money (check out the Profitable Business Planner).So please know that this advice about what you should outsource first is more centered around what will help you be more profitable and grow your business than a specific role recommendation – because that’s the key to knowing what you should outsource first!What are the 5 steps for success in business process outsourcing? Let's get into it!(P.S. Yes, there are some affiliate links in this post but only to things I use and love. Because otherwise - ew).What you should outsource first – Step 1: Track tasks and timeStart making a list of all the things you do in every aspect of your business no matter how mundane. This should honestly take a week or more to really be comprehensive. It’s a good idea to time track those things too and to help take care of both I recommend using Timebro. It tracks for you what you’re doing on your computer and then you assign tasks to the time/app. It’s not perfect but it helps a lot, so you don’t have to remember to click the timer button like on some other apps. The key thing you want is a list of tasks you do in your business + the time it takes you to complete the task. I know you probably thought that the first step was to start looking for someone to hire but I promise that if you start with what you should outsource first your hiring experience will be much better. What you should outsource first – Step 2: Eliminate firstOne of the most common mistakes I see people make in entrepreneurship is thinking they have to do “all the things” if they want to be successful. The same thing comes into play when thinking about what you should outsource first.Before you start working on figuring out who to hire based on that list you made – your first step should always be to eliminate.Now, if you are a natural purger (like I am) this will be fun. If you are a natural hoarder, this will be harder. But it’s critical nonetheless. Because when you're trying to figure out what you should outsource first it's not about adding tasks - it's about removing tasks from you so you are free to do the tasks that are the $$ earners.I think that every business owner should have a set of criteria for their tasks and periodically review those tasks to see if they should remain a part of their business. Your criteria will probably look different than mine, but I will share mine with you.In order for a task to remain on the to-do list in my business it must:- Add value to me, my client(s), or my community (preferably all three)- Be either actively earning me my desired compensation (client work that is paying me what I’m worth)OR- Generating ideal client leads for client work (and yes, I track this)Now you need to write your own – and I encourage you to really take your time with this. Take some time, completely separate from your list of tasks to really think about what you want to be spending your time on.Once you have your criteria listed (or you’ve stolen mine – you rebel), go through every single task – yes, everyone – on your list and see if it meets your criteria or not.If it doesn’t meet your criteria, cut it. Be ruthless. I don’t care if the top guru of whatever told you that you “have” to do it in order to be successful. IS IT WORKING FOR YOU??? No? Chop Chop.You do not have time to do things that are not meeting your criteria. And you CERTAINLY should not be paying people to do things that you shouldn’t be doing in the first place. Seriously.A few questions if you are getting stuck eliminating things, ask yourself:- When was the last time this task brought you a paying, ideal/dream client?- Do your clients really like this being done for them or do you just think they like it? (Not sure, do a client survey)- Would anything change if you stopped doing this task?- Is this task helping you actively move towards your goal? Or is it just filling time?What you should outsource first – Step 3: Assess what’s left & AutomateIf you have not eliminated anything, or at least 10-20% of your tasks you probably have not been ruthless enough. I love you – so please take this part seriously.Once you have whittled your task list down to ONLY those things that are meeting your criteria (aka adding value for you, your clients, and/or your community and actively earning you $$) then you are ready for the next step.And it’s STILL not outsourcing.The next step is Automating.Because if you have some broken, manual processes in your business NOW is the time to fix them before you hire someone to do your manual, broken processes. When you're trying to think about what you should outsource first going through your processes and realizing how crazy they are helps a LOT.I speak from experience here because I almost did this. I was certain I needed an OBM and my sweet friend, Rachel Haley from Rachel Stays at Home said, “No Sarah, you need an inquiry, onboarding, and offboarding process and some SOPs. And then you could hire a virtual assistant or do it yourself and it would be easy”. She was right.I hired her for her OBM Month, and she whipped out my inquiry, onboarding, offboarding, and SOPs for those (and a template for ongoing stuff) and those processes practically run themselves now! She thought of so many automations that didn’t even cross my mind. (You can find her awesomeness here if you’re interested in booking with her – rachelstaysathome.com)Some things you may want to consider automating or using for automation:- Inquiry process - most commonly folks use Dubsado or Honeybook- Onboarding process - I recently switched to Clickup (after avoiding it for years and I adore it now)- Offboarding process - This is Clickup for me too now- Invoicing and billing - I use Xero (of course) and GoCardless (for minimal transaction fees)What you should have now to do as manual tasks should be even less than what you had after you did when you started this process. You should now have reduced your grand total of all tasks from the very beginning step by around 25-30% (at least, if you are a rock star shoot for 40%). Now we are finally getting down to what you should outsource first, let's get to this last prep step.What you should outsource first – Step 4: Gather and groupOk, now that you’ve whittled away things you:- Shouldn’t be doing in your business at all- Things you can automateIt’s time to take what’s left, gather it up, and group it into roles that actually make sense. Channel your inner Clea and Joanna and put things into beautiful little categories so that when you think about what you should outsource first, it's easy to understand. You see, this is the primary way that people screw up outsourcing. They see a role that sounds about right, meet with people, hire someone for a specific package then figure out how to use what the hell they hired.Wrong. Wrong. Wrong.The whole exercise of what we’ve been doing here is to figure out what you need in your business and then create a grouping of tasks that you would hire someone for. That way you are getting the right work done by the right person.So, how do you know what things go together?Follow these steps:- Put together all things that don’t involve client work- Put together all things that involve touching client work but are not actually interacting with the client- Put together client work that involves direct interaction with the clientThese are your three big groups. Now within those groups highlight everything that is repeatable (same process every time)This is your starting point. In the end, you should have a list of administrative tasks that could be outsourced to a Virtual Assistant, a list of client work that could be outsourced to a junior designer/Pinterest manager/bookkeeper (pick your niche), and a list of tasks that you should be automating for yourself.What you should outsource first – Step 5: Set a budget and hireNow this last step could really be a whole other blog post – and I will be writing one in the future on exactly this topic – but the final step to knowing what you should outsource first is to set a budget and hire.Why set a budget? Because whoever you're hiring should be helping you make MORE money in your business (for more details on that read why you should hire a team).You should be specifically freeing up your time so that you can do the things needed to make more money. Don’t ADD tasks that you don’t have time for now. Take tasks off your plate.What you should outsource first – Conclusion:My simple system is this – list, eliminate, automate, group/gather, budget & hire. You will save yourself so much time, money, and a lot of headaches if you use this approach when considering what you should outsource first.

[leoandvern]

What not to outsource in your online service business: 11 critical things

As a small business owner, even the idea of hiring can be both scary and exciting. Knowing why you should hire a team in your small business is one thing, but what do you hire FOR? This guide will help you understand what not to outsource in your small business. Because outsourcing the wrong stuff is worse than not hiring at all!What not to outsource #1 – Client meetingsNice try, you thought you could outsource time spent with your clients? Not so much. As an online service provider, the key to maintaining client longevity comes with your relationship with the client. People sign up to work with you, not really your team. Don’t take away the reason people signed up.I personally find client meetings to be my favorite part of my job so it is definitely a task I wouldn’t outsource even if I could. That being said, if client meetings are taking up too much of your time make sure you are including parameters for how often you will meet and for how long in your contract.(If you are not using a contract – pretty please start using one! – I got mine from The Contract Shop and they are awesome, easy to edit and come with great video instructions).What not to outsource #2 – Company Vision and DirectionYou own your own business for a reason. Whether it’s because you wanted time freedom, financial freedom or just the ability to not have to take orders from someone. That is why company vision and direction is a task you should never outsource. While it’s great to get inspiration from other business owners, friends, and mentors; it is your business, and you ultimately need to make the call.If you hire someone to come up with this for you? You are giving up your control and really the power that you should have as the CEO of your company. And I get it, it’s freaking scary as hell to have the weight of a company relying on you to come up with the right direction and vision for it.It is also the opportunity to create a company that helps you live your dream life. You get to set the hours, the expectations, the pay, everything! I often see business owners get caught in the trap of just recreating the experience of what they had in corporate (if they ever worked there) because it’s familiar. But owning your own business should be the exact opportunity to question every single thing you know about how business has to operate and create whatever the hell you want!What not to outsource #3 – Final say on hiresThe irony here is strong. Please don’t ever give someone else the entire responsibility for hiring your team members. You should always have the final say because it is ultimately your company that will be affected by whether the hire is awesome or not.Now, that’s not to say that you can never outsource any part of the hiring process. Finding, vetting, and initial screenings for candidates is actually a great opportunity to outsource. (If you are looking for help for this my girl Vanessa at Onthegohr.com is your gal!)Hiring is expensive as hell – you have to train them, take time to check their work, pay them, etc. And every time you have turnover you have to do it all over again and your productivity takes a hit (also an indirect expense). So, hiring the right talent is important.What not to outsource #4 – Customer Service / Customer Service StandardsLet me explain this one a bit further. I don’t mean that you can never hire someone to help with providing great customer service. I mean don’t hire a call center of randos to answer questions for your clients. Seriously. I bet you’ve experienced this before, right? You start with a company that seems awesome and then they grow and all of a sudden you can’t actually speak to someone to save your life! And when you do you never get the same person and you have to repeat your issue over and over again – and then they transfer you – twice – and then your call gets dropped. Tell me I’m not alone here!This is not the customer service you want to deliver. If you’re going to “outsource” this, then hire someone specifically to handle this in a personal and customer-centered way so that your clients can build an actual relationship with this person and feel like they know them.Also, another task you think about when considering what not to outsource along this line is developing customer service standards. You should be developing these yourself so that you can be sure that if you do outsource this task, you have a clear direction for anyone you hire.What not to outsource #5 – Signing off on expensesWhile you will likely want to outsource the managing of your books and overall finances (hi, have we met? I can help with this 😊) what not to outsource is signing off on expenses. You should still know exactly why expenses are happening, and what they are for, and have 100% veto power on any of them.Many entrepreneurs think that if they hire someone to do their books they will “lose track” of their finances. No! What it actually does is help you not have to get caught up in the day-to-day management of it all so that you can look at things like expense management, profitability, pricing strategy, and more because all the information is there for you to easily access. (This is actually exactly what we focus on here at Leo & Vern so if you need this, please book a call with us so we can chat).What not to outsource #6 – New product/service developmentIf you are thinking about coming up with a new offer or service that’s all you boo. While you can hire someone to help you implement your idea (once you’ve vetted it of course) you need to develop the idea yourself. You know your target market better than anyone else. You know how this new potential offer will fit nicely into your product suite, how it will help your business grow, and how it will help you reach your goals. The basic rule of thumb when thinking about what not to outsource is that you can’t outsource any of that strategy and your personal knowledge. Now when you are ready to launch the offer if you want some help that’s a great thing to outsource. And, as always, I have some recommendations!- Course creation - Maria Crider at Spiritual Systems- Podcast - Taryn Sowa at Taryn Sowa Productions- Facebook Ads – Genevieve Rachel at Sparkle and ScaleWhat not to outsource #7 – Termination managementNever a fun topic but crucial and one that people often miss when thinking about what not to outsource. Just as you should always have the final say on hires, you should also be the one who decides when it’s time for someone to move on. This is a task you should never outsource.While the idea of letting someone go actually should be unpalatable to you it is a necessary component of running a successful business. Sometimes people are a great fit and then the company outgrows them – or they outgrow the role and performance suffers. There are many reasons why hanging on to underperforming people hurts not only your profitability but also your client experience and your company culture. This brings us to…What not to outsource #8 – Company cultureWhen thinking of what not to outsource, culture was top of mind for me. Culture is as unique as a fingerprint. It doesn’t come from a mission statement, vision statement, or logo. It comes from all the unspoken, unwritten rules that people within the community of work follow and agree to. And those rules can be good or bad. For example, people can “just know” that you don’t offer suggestions in meetings because the boss only likes their own ideas. This is a negative culture in action. Or you can cultivate an environment where people openly question processes and practices regularly in the name of innovation. You could see this as either an exciting place to work or as an insane one depending on your preferences.This is why having a clear understanding of your company culture, both as it is and as you are trying to mold it to be, is so important when deciding who to hire. And you can’t hire some HR expert to “develop” company culture and then leave.Culture is a living and breathing organism that requires continual attention and intention if you want it to be positive and supportive.What not to outsource #9 – SalesThis is pretty similar to that call center customer service example, but I feel like this task is its own beast. Sales are considered a "what not to outsource" because it literally sets the tone for your entire client relationship.I know there are advertisements for this service too. Don’t be deceived. No one knows your service as you do, no one else can explain the benefits and why it would benefit that particular client in a way that makes them say YES. In addition to this, if you outsource your sales, you also pass on the opportunity to screen out potential clients that look good on paper but put off a weird vibe. (You know what I’m talking about right? Like until you meet them you think they’ll be great – and you realize your personalities just don’t mesh…)Sales calls are like dating – you can’t outsource compatibility. If you aren’t comfortable with sales, then you need to find a method that works for you because if you don’t sell you don’t have a business. People are not going to just throw money at you. As nice as that would be when you offer a service people want to get to know the person before they book. So, a sales conversation is just one of many that need to happen during the sales cycle.And building that rapport and connection is one of those things you should not outsource.What not to outsource #10 – Marketing Strategy oversightI almost hesitated to put this one on the list but I’m doing it anyway. There are so many areas of marketing that you can outsource effectively; however, the overall strategy is something that you as the owner should never let go oversight of. That's why it's on the list of what not to outsource.What do I mean by oversight? We’ve already talked about how you should be in charge of the culture, vision, and direction, and marketing strategy is a component of the overall company plan. How will you market? What channels will you focus on? Where will your main “hub” be that you want to drive traffic to? Will you blog? Podcast? Do mostly social media? There are many options for marketing but being intentional about what to focus on and why is your job.Because let’s be real, there is an expert out there you can hire for any of these options – but which one do you need? That’s why you have to determine your marketing strategy instead of just hiring willy-nilly because someone says “x, y, z marketing tactic” is the way to go. No! Be intentional and do some market research to figure out where the heck your ideal clients are even likely to find you!What not to outsource Bonus #11 – Quality Control & ResponsibilityI couldn’t help but throw in an extra "what not to outsource" that I think is really vital that you may not even think about. One of the biggest what not to outsource is quality control or responsibility.Now you may think, how could I even outsource that? It could be as simple as, not having quality checks in place for your team (no matter how many times they’ve done a task there are always possibilities for error – it’s not about mistrust it’s about ensuring a quality service delivery). It could also mean blaming your team for mistakes when a client is unhappy.The buck stops with you. You are the owner. Any mistakes, any errors are your fault. #sorrynotsorry. This is what it means to take responsibility for your business. That’s why quality control and checks are so vital. Because if shit hits the fan your clients won’t be looking to anyone but you for answers.ConclusionI hope this has given you something to think about and hopefully made you realize that there are just somewhat not to outsource in your small business. Like it or not, if you want your business to run well and be all that you want it to be you have to have your hands in it to some degree.If you are looking to outsource your books and/or looking for the strategic financial services of a CFO we would love to hear from you! Book a call to learn more about how we can help.

[leoandvern]

15 Best Budget Categories for Online Service Providers

This post contains some affiliate links, while it does not increase your cost at all I do receive a small commission for the research I did to bring you these resources. That said, all opinions are my own and I only recommend products I love and use myself!When thinking about creating a budget for your small business there are a few things to consider first:- What do you want your budget to DO for you- Why it matters- Next, what should be includedThat’s what this week’s post is all about. Using the correct small business budget categories will go a long way towards making sure that you are accurately considering the true costs of running your business, will make your accountant love you at tax time, and help you prepare for future growth!Business Budget Categories: What are we talking aboutYou probably already know what section should be in your budget (income, expenses, taxes, profit, owner salary) but today we're talking about something else. Today it’s about which business budget categories you need to make sure you’re considering when you are tallying everything up!You see, when we are thinking about costs we very often forget to include all the things that we should. It’s ok, it happens to us all, especially those pesky ones that only come up once per year! That’s why having a small business budget is so important! So let’s talk about which business budget categories you should be making sure you have addressed.15 BUSINESS BUDGET CATEGORIES: COMMON ITEMS TO CONSIDERThis list covers all the most common business budget categories for an online service provider. - Accounting Software - whether you use Quickbooks, Freshbooks, Xero, or something else you need to be tracking your finances (and by extension your business budget categories). You don’t have to do the management yourself, you can always pay for fractional CFO services. I personally do all my books and my client work in Xero. It's most cost-effective and plays a LOT nicer with PayPal.- Advertising & Marketing - think Facebook ads, Google ads, and other things like podcast placements, wedding shows, etc. Frequently an item that the inexperienced like to cut down on...to their own detriment. This could also include photography sessions or purchased stock photography, landing page services, etc.- Bank Charges & Fees - You should NOT be using a bank account for your business that charges fees. I recently started using Novo and it’s incredible. Not only does it have zero fees but it’s a business partner with Stripe so you pay less processing fees when using Stripe for payments as well. Win-win!- Contractors - these are the support folks you have that either do one-off work for you or you pay monthly on a retainer basis. Think virtual assistants, bookkeepers, online business managers, ghostwriters, etc.- Insurance - do you have insurance for your business? If it’s not something you’ve ever considered you may want to. There’s a great article you can read here about all the different types of insurance you may want to think about. Especially as a business owner, you want to protect your income and your personal assets as well. I personally go through Biberk.- Job Supplies - are there specific supplies you need to create your product or service? This could include a course delivery platform (my favorite after trying them ALL is Kartra), design software, Adobe, Canva, social media schedulers, or any other thing you need to actually complete the work.- Legal & Professional Services - This is for the attorney you use to create your LLC or your client contracts (please tell me you are using contracts!). It can also include your CPA for your taxes. If you need help with contracts there are some amazing contract templates you can get at The Contract Shop!- Meals & Entertainment - Do you meet with your clients in person? Do you chat over coffee? This category covers those things. If you do this often it should absolutely be included in your budget! (P.S. Including these categories in your budget does not mean they are all tax-deductible. Meals can be, entertainment is not). - Office Supplies & Equipment - this is all the stuff you need to do the regular ol’ business stuff: computer, email distribution provider, website hosting, Canva, domain hosting, social media scheduler, etc.- Other Business Expenses - This is for other stuff that you don’t see listed and most often for entrepreneurs you should be thinking about education here. Business coaching, learning a new skill, getting a new certification, etc.- Rent &/or Lease - if you have a brick-and-mortar space this is for you. There are very strict guidelines about whether you can do this if you work from home so please check with your CPA about whether your space qualifies for this taxwise.- Repairs & Maintenance - If you have the equipment you will eventually need to replace it: computer, microphone, headphones, camera, other tools used to create products, etc. Save for this stuff now in your budget so you don’t have to scramble when it happens- Taxes & Licenses - Do you pay annual business license fees, LLC fees, and licensure fees for your certifications or license to practice your work? Include these here as well as what you should set aside for your taxes. In the US, most small businesses should file taxes quarterly, so you should invest in a CPA as one of your first contractors! You do NOT want to figure this out on your own. It’s a hassle. - Travel - Do you see clients in person? There are rules around business travel and you can discuss those with your CPA but it is well worth exploring if traveling is a key component of your business. Even if you’re not wanting the write-off taxwise (although if you can, you should!) If you want to go to a fun conference or retreat, think about placing some money aside for it!- Utilities - again, straightforward if you are a brick-and-mortar business; check with CPA for home utility write-off options. BUSINESS BUDGET CATEGORIES: NOT JUST FOR BILLS BUT FOR SAVINGS TOOWhoo! I know that was a big list! You may not have current expenses (aka bills) in each category and that’s ok. Don’t sign up for more bills just because you have business budget categories to fill. The list is for you to make sure you aren’t forgetting anything important!Small business budget categories are not just for bills though, you should also make sure you are saving for future expenses. If you have annual bills that are due, make sure you are setting aside a monthly amount so that the money will be there when you need it. If you want to buy a new computer next year, price it and then calculate how much you need to save.BUSINESS BUDGET CATEGORIES: FINAL THOUGHTSNo matter which small business budget categories you use the most it is important to cover all your expenses in your monthly budget somewhere. If you only plan for what is “due” that month you will fall victim to a classic error that will have you scrambling, ill-prepared, and likely out of business.And remember you don’t have to track all of your expenses yourself. One of the first things you can and should outsource is your bookkeeping and finding yourself a good CPA. In fact, you can hire someone who will manage the whole financial aspect of your business for you! If you are ready to have the details handled by a pro, then book a call to find out how I can help!

[leoandvern]

Are you guilty of making any of these top 10 cash flow mistakes? Let's see if we can't fix that because cash flow mistakes are the #1 reason that online service-based businesses fail. We don't want that to be you!Cash Flow Mistake #1: Charging hourly ratesOh my, goodness is this one a doozy! I mean, we're all about ditching corporate over here so you know that I'm going to give you hell for this one! WHY in thor's name are you working for an hourly wage like you're still working a corporate job???You own your own business now! You do not have to play by the corporate rules! What to do insteadFlat rate retainers/projects are the only things you should be using as an online service provider. And don't just tally up how many hours and multiply! We're talking about pricing based on the value you are offering to the person paying you. (Don't know how to do this? Check out HerHQ.co to learn how to do this better in your business. Those ladies are the shit!)Cash Flow Mistake #2: Investing too much in "coaching"I know the siren song of the business coach is strong. There are some really great ones out there and then there are the ones who are straight-up energy vampires that get you addicted to sucking off their energy that they are sucking off other people... and in the meantime, they suck up all your profits too. Plus the typical sales pitch talks about "manifesting" and "trusting yourself to make back your investment". I have news for you. There is no magic pill. There is no one miracle cure that will instantly make the money pour into your bank account like the Niagara falls. Every single business coach is selling the exact same thing - are you ready?Business coaches sell what worked for them.That's it. That in NO WAY means it will work for you and as long as you skip from one coach to another trying to find the magic thing that will make all the business stuff just "flow" then you will continue to bankrupt your business. What to do insteadInvest in a "coach" when:- You have the money to pay for that coaching out of the profits of your business- You want to get some specific advice that will help you in a specific area of your business- You intend to be the person taking the action (otherwise you should be outsourcing this instead of learning it yourself - see next mistake)Cash Flow Mistake #3: Not hiring helpYou cannot run a profitable business and DIY every single thing in your business. You just can't. I don't care who you are. You will never be the expert in everything nor should you be trying to be.Look I get it, it's counter-culture to focus on being really great at a few things and letting the rest go. We are told that we should "do it all" to "have it all" but it's bullshit. When you try to do everything yourself you are setting yourself up for a major cash flow mistake. How? You are taking up your time that could be used generating new clients/sales with tasks that you could pay someone else to do for a fraction of the cost. If you are paying yourself well (and you should be) then your time is worth a lot. Don't waste it doing tasks that someone else can do for less money and, frankly, can probably do a lot better than you. Facebook ads? Stop trying to take a course to teach you to be an ads expert. Seriously. There's a reason it's a full-time job to keep up with that shit. Outsource. Email management, social media posting, blog writing, podcast editing, finances - all things to outsource so you can focus instead on money-making tasks. What to do insteadOnce you are paying yourself well, saving enough for taxes and profit, and have enough in operating expenses to outsource - do it. (If you aren't sure what that looks like check out my post on How to implement Profit First with one bank account)Specifically, hire someone who can take away the work that is currently preventing you from taking on more clients. This creates an immediate return on investment and helps prevent the next cash flow mistake. Cash Flow Mistake #4: Hiring help too soon/too fastDo NOT hire before:- You are paying yourself your ideal salary- Saving enough for taxes- Saving for profit- Have operating expenses within your ideal range AND - Have enough left over to pay for your contractorHiring a VA (very typically the first hire) before you are ready is only going to kill your profit margin and keep you from growing your business. Plus this cash flow mistake of hiring too soon and/or too fast means that your operating expenses will very quickly outstrip your ideal target percentage. (again if you missed how to calculate this read this post here). What to do insteadHire based on the formula I gave in mistake #3 and hire one person at a time. If you are in it for the long haul then you want to take it slow. You will make mistakes when you hire and you'll learn a LOT about how to effectively onboard and train someone. Plus you'll see tons of gaps in your processes that need help. Fix this with your first hire before you bring on a crap ton of people, have a hot mess on your hands, and have to stop paying yourself because you hired so many people the costs got away from you and you're too afraid to let any of them go. Cash Flow Mistake #5: Your expense margin is too highMost people think that making more money is the key to solving any cash flow mistake. They are wrong. The one thing you can control the easiest and the fastest is your expenses. If your expense margin (the amount you spend on expenses compared to your overall revenue) is too high then you will ALWAYS have cash flow issues no matter how much money you make. Because the more you make the more you'll spend. What to do insteadFirst, go read How to implement Profit First with one bank account. Then take a look at your expenses and see where you are at in relation to your ideal percentage. My rule of thumb for expenses is this: If it's not 100% necessary to complete client work or client experience or actively making you money then cut it.Sarah BlanchfieldBrutal? Maybe but we get a bogged down in a lot of "should haves" with our expenses - when in reality the only things we NEED are the ones that we have to have to do the work, give clients an incredible experience and/or are actively making us money (aka bringing in new clients or sales). This may mean that you have to evaluate whether the time, effort, and money you are putting into some areas of your business is actually bringing in sales. This is a GOOD thing and brings us to the next cash flow mistake. Cash Flow Mistake #6: Not tracking leadsSurprised to find this one on a list about cash flow mistakes? That's why it's here. Because people do NOT realize the power of lead tracking and how it SHOULD be impacting your financial & business decisions.If you are not tracking your leads you are missing out on knowing:- Where people are finding you- How people are moving through your offer suite- How long it takes for people to purchase after entering your community- How long your clients stay on average (if you're retainer-based)And all of this information is critical to avoiding cash flow mistakes because it tells you:- Where to market - and where not to- How to help up/downsell people at the right moment based on how people typically move through your product suite- How to anticipate when new sales may come in based on marketing pushes- Where you need to shore up your processes and/or add new offers to keep people in your offer suiteSo I think you can see the benefit here, amiright? Understanding where and when the income is likely to come in is vital. Going back to expense management you should also be able to see where to cut costs that are not generating anything for you. What to do insteadIf you aren't already using a lead tracking tool check out this one by Abby McGrew of Wayfarer Design Studio. It's the one I use and it's freaking awesome. I love that it's easy to plug in your info and it gives you lots of pertinent data. The rest of my information about folks is captured in Xero (because once someone buys they aren't exactly a lead anymore!)Cash Flow Mistake #7: Not setting profitable pricesI know we touched on prices in the first cash flow mistake but just because you're charging flat rates doesn't mean that the rate is profitable. Most folks start out seriously undercharging because they are basing their price on:- What they would be willing to pay for their own services- What other people are charging- Their hourly rate times the number of hours of work- Their intuition (spoiler alert: your intuition gets hijacked by your money mindset crap and insecurity...so just stop it with this one, k?)Just like with tracking your leads to make sure you're focusing your time/efforts on where you can get the most bang for your buck; pricing is the same.Some offers will be more profitable than others. You want to know how much each offer costs you to fulfill (your time, contractor time, software costs, etc.) and how many people are buying it to understand whether it's an offer you want to continue. For example: if you offer social media management for $500/month. It may take you 8 hours of work. If you want to be taking home even $50/hour that's $400 already gone. Then software costs, let's say another $25 for that client. Total profit $75. That's a profit percentage of 15%. Whomp. Nope. Not profitable. What to do insteadLet's take the same parameters and turn them profitable. 8 hours at $50 = $400. Plus the software for $25. So that's $425. In order to make a 60% profit margin, you would need to charge $1050/month for the same service if you wanted to do the work yourself at $150. OR you could hire a contractor to do the work at, say, $25/hour. 8 x 25 = $200 + $25 (software) = $225. You could make a 60% profit margin by charging $550/month. See the difference? Both are great options. Both are now profitable. Lesson? Just because you have a tiny bit of money left over after your "wage" and expenses for the job, it doesn't mean your pricing is profitable. (And also, there is ALWAYS more than one way to be profitable). Cash Flow Mistake #8: Shiny object syndromeI know this cash flow mistake well. Don't feel guilty if this one hits hard, because I get shiny object syndrome too.We are like kids in a candy store - we make a bit of money and FINALLY, we can invest in what we want to purchase, all under the guise of "building" our business. I'm actually not even going to tell you to stop with this one - the key is not to stop - the key is to plan for this to happen. Because it's not a matter of if, it's when. What to do insteadWhen you are creating your business budget and thinking of all the categories of things you need to have in your budget plan for shiny object syndrome to occur. (If you are reading this going "say whaaaat???" read 15 Best Budget Categories for Online Service Providers)If you deliberately set aside money to spend in this area then at least when you feel the compelling need to purchase that $37 template that the Instagram story ad is pitching - you will purchase it without blowing your budget. Cash Flow Mistake #9: Only focusing on income generationI know we've talked about this a bit before in other cash flow mistakes but it bears repeating. Focusing on fixing your cash flow with just more money is a losing battle. There are multiple factors that come into play when solving cash flow mistakes and it won't be solved by simply making more money. Remember, there are multi-million dollar businesses that go bankrupt because they don't manage their cash flow correctly. They make a hefty bundle but it flew right back out the door and then they had to close their doors - for good. It's not how much money you have but what you do with it that countsSarah BlanchfieldWhat to do insteadYou need to have a comprehensive cash flow plan that takes into account:- Expense management- Income forecasting- Timing of expenses, income, and deposits- Taxes- Profit savings- PayrollCash Flow Mistake #10: Not paying attention to it at allTruthfully this one is the most dangerous cash flow mistake of all. Ignoring your business finances is the fastest way I know of to kill your business. Most folks don't ignore it completely, they fall into one of the traps above and then overfocus on one or two areas instead of developing a comprehensive, proactive plan. What to do insteadIf you are remotely tempted to ignore it altogether, do what you would do in any other circumstance - hire a professional to help or quit trying to be a business owner. Those are really your only two options. Either pay someone else to help you (you will still need to care about it some you can't outsource caring about your finances) or stop being a business owner because if you insist on ignoring it long enough that's exactly what will happen anyway. You've been warned. If you know you are focused on a couple of areas but don't have that overall plan happening and know you're ready for more - then YOU are perfectly normal and in a great place to benefit from CFO Services that can help you get that proactive plan together!

[leoandvern]

Why you should hire a team for your small business: 5 great reasons

Have you ever wondered why you should hire a team for your small business when it’s so obvious you’ll keep more money if you don’t? I’m going to give you 5 reasons why you should hire a team and why failing to do so will actually prevent you from reaching your income goals.Why you should hire a team - Reason 1: It frees up your time to focus on growth and strategyWhen you are stuck in the day-to-day grind of meeting the needs of your clients, you have no time to think about growing your business, long-term strategy, adding efficiencies, or anything else.You end up treading water just to stay afloat. And just like treading water, you spend a lot of time and energy just keeping your head above water, but you never make any progress toward your goal. Treading water is not swimming. And in order to swim you have to – are you ready? – STOP TREADING WATER.In order to make the progress you want to make in your business, you have to stop doing everything yourself because it is preventing you from having the time and energy to focus on growing your business and achieving your goals.That’s why you should hire a team – so that you have more time and energy and can finally stop treading water and actually start making movement toward your goal.Why you should hire a team – Reason 2: You are taking advantage of expert knowledge

[leoandvern]

How to implement Profit First with 1 bank account

If you've been an entrepreneur for a while you've likely heard of Profit First, by Michael Michaelowicz. It's a great book worth reading if you want to have a sustainable business that builds generational wealth (which is what we are all about here!)(This post contains affiliate links that, while they do not add any cost to you, do provide me with a small reimbursement. I do not recommend any products that I don't love and am actively seeing value come from in my own life or the lives of my clients).The premise of Profit FirstThe basic concept of the Profit First methodology is this - separate your money into different accounts so that you don't have to keep track of it. He recommends the following accounts: income, profit, owner's compensation, tax, and operating expenses.Then he recommends having two additional savings accounts at a different bank: profit hold and tax hold.That's seven accounts at two different banks - are you exhausted yet? I mean, I get it. NO ONE, including me, wants to spend a ton of time tracking their finances. It's boring as hell. But seven bank accounts are a nightmare. That's not ease. I demand ease in my finances at all times and you should too.Profit First the Leo & Vern method: Step One - Using the right accountIf you don't already have a business checking account, you need one. There is one checking account that I recommend above all others, especially when it comes to using Profit First. It's from Novo.Why Novo?- No fees- Track income and spending in the app itself- If you aren't using a bookkeeper yet you can actually categorize your transactions in the app and it will run reports for you at the end of the year- Physical and virtual debit cards- Connects with Stripe, Square, Shopify, Paypal- You can actually invoice from within the bank account- Make payments with Wise, Venmo, Cash App, and Paypal too- Connects seamlessly with your accounting software - QBO, Xero, Wave, Freshbooks- Connects with payroll services - Gusto, ADP, Paychex- Connects with budgeting apps like Mint, and You Need A Budget (more on this later)- Has a great perks program with things like waived Stripe fees, instant Stripe payout, and discounts on Google ads, QBO, Gusto, and moreIn addition to all this, they have a wicked awesome feature called "reserves" that make setting up your Profit First a cinch.So, step one, get yourself a Novo account. Profit First the Leo & Vern Method: Step Two - Connecting everythingNow that you've got your bank account set up it's time to make sure that all your income will come into this new account. So go into your payment processors and update your stuff.Now go in and update all your bills so that they will be getting paid out of this account. You want to have everything funneling in and out of this one account because good grief that makes it easier!!Next, make sure you take the time to set up the ability to transfer money to yourself - because you deserve to get paid baby!! I do this by setting myself up as a payee in Novo so I can transfer my money regularly. Got all that done? Whew! I'm proud of you! Let's keep going!!Profit First the Leo & Vern Method: Step Three - Creating ReservesNow you get to start doing some Profit First actions! Go into your Novo account and create three reserve accounts: profit, owner's compensation, and tax.Why three? Where did income and operating expenses go? We'll get there - hold your horses.We also ditch the two other accounts at the other bank. Why? Because they just make things complicated. And complicated is not our jam around here. We want simple. The concept of the reserves with Novo is to take the money out of sight without removing it from your bank account so that if you need it's there! No more insane transfers at the last minute and having to spend out of the wrong account just to get the bills paid. Profit First the Leo & Vern Method: Step Four - Determining your percentagesSo in the Profit First system, there is something referred to as "TAPS" (Target Allocation Percentages). We're going to call them percentages because we're real humans. The basic goal is to figure out what percent of your overall revenue should go into each category:- Profit- Taxes- Owner's Compensation- Operating ExpensesFortunately, Profit First also gives us some pretty clear recommendations to start with. Since we have to total 100% (obviously) let's start with the easiest ones. Profit - 5%This is a solid recommendation, don't mess with it. Just do it. Taxes - 15%I'm going to say that I actually feel less awesome about this recommendation considering it's extremely general and doesn't remotely take into consideration your personal circumstances, whether you have people on the payroll, etc. Takeaway? Talk to your accountant - explain your ENTIRE tax situation, and expected income, and get a recommendation of what this percentage should actually be. Owner's Compensation - 50%I won't lie, this is the one that people tend to ignore first. They spend as much as they make trying to "grow" their business, get burnt out as fuck, and then wonder why they don't feel fulfilled in their business. Do NOT let this be you. 50% is a solid start but I personally work to help the businesses I advise run lean and pay themselves more. Operating Expenses - 30%I like this recommendation and when you look at what you've been spending you'll either be super pleased with yourself or shit your pants. There's not a lot of in-between on this one.So how do you figure out what your percentages should be?If we assume you're sticking with the Profit 5% and you got some figures from your accountant and they say to sock away 15% (just for argument's sake) that leaves you with 80% of your overall revenue to figure out. First, figure out how much money you need to be bringing home for your personal life. Why start there? Because you DESERVE to be paid well enough to live your dream life. So if you don't start here you will undercut yourself.Next, see what percent that is from your overall revenue. So if you make $15,000 per month and you need to take home $8000/month then $8100/$15000 = 54%So if we that means in this scenario your breakdown would be:- Profit - 5% = $750- Taxes - 15% = $2250- Owner's Comp - 54% = $8100- Operating Expenses - 26% = $3900Now if you look at what is left over for your operating expenses and you spend more than that, you can make some choices: find ways to trim costs or reduce your take-home pay. I ALWAYS start with reducing business costs because running a business with minimal costs will help ensure that your business STAYS in business in the long term. Overspending on operating costs is the thing that will put your business under faster than Amber Heard on the witness stand. Profit First the Leo & Vern method: Step Five - using the reservesNow that you know your percentages it's easy to implement Profit First using one bank account. You use your reserves. Once your income comes in for the month (even if it comes in spurts) you know exactly how much you need to add to each reserve each month. Like that example above, when the income comes into the checking account you will go into Novo and select the reserve you want to add to. If you wanted to put the $750 in profit you would click on profit, add and type $750. Then you will see the magic! The money is put into the reserve and REMOVED from the overall bank balance that shows as "available". The main reason that Profit First recommends different accounts is the idea that if you see it you will spend it. Reserves help with that because it takes it out of your overall balance so it LOOKS like it's not there. The downfall with Profit First and all its recommended bank accounts is that you are constantly transferring money back and forth and that's annoying, plus if you get in a pickle the transfer may not make it to the account you need in time and then you end up spending out of the wrong account. Quel nightmare. Using the Novo reserves the money is actually still IN the account it's just tucked away from sight in your tidy little category. So each month you add enough to reach your goal for the month and then you're done!Profit First the Leo & Vern method: ConclusionUsing Profit First is widely held as the gold standard for financial management for small businesses and I wholeheartedly support it. In fact, determining percentages, monitoring progress, and implementing Profit First are one of my favorite parts of the CFO Services I offer my clients. Want to work together?