Exposed - What You Can Learn From My Biggest Money Mistake In 4 Years

Exposed – What You Can Learn From My Biggest Money Mistake In 4 Years

This week I think it’s important to be totally transparent with you about what’s going on monetarily in my business. 

This is a bit of a divergence on how I usually do things, but I think it’s really important because there are a lot of lessons and insights in what I’m going through in my business. 

To set the stage, I’m in the middle of going through my allocations for the month in Profit First and I haven’t seen anything like this in years. 

Backing up a step, Profit First is a way of organizing your money into different accounts so you can see, without a P&L or any spreadsheets, where your money is sitting. The focus is on allocating money from your revenue account into your other accounts, like operations, taxes, etc.

I’ve been using Profit First since 2016 and started using it because I had sales coming in, but no cash, and just wasn’t doing a great job of tracking my cash flow. This all came to a head when I was going to a mastermind retreat for the one I was participating in, and I had no idea how I was going to pay the hotel fee, and for meals and gas. I was running a multiple 6 figure business, but my cash flow was all over the place. It was embarrassing to sit there in person and admit I had no cash. 

That’s when I got serious about implementing Profit First. So I went home, pulled all my sales mojo together, went and sold like a wild woman, and got some really large corporate contracts. I got them to pay in full by offering a very small discount, took that cash, and applied Profit First to it. That made sense to me, to divide it up across accounts and allocations of where I would need it. And I’ve never looked back, and never had another cash flow problem again. 

Having the Profit First system in place has honestly allowed me to make more money in my business because it is a system for holding money.

Quick side note about holding onto money. Often I work with clients who hoard their money and are often very proud of this. I’d like to caution that hoarding your money is harmful and detrimental to your business. If you are hoarding your money, that’s not a great place to be, it’s detrimental to growth capital and inhibiting growth. When you are cash rich you can buy back your time, you can’t do that if you are hoarding it. You are working too hard for money for it to be sitting there in a bank account doing nothing for you. 

Back to Profit First, starting with it gave me a system that calms my nervous system so I can receive more. 

It’s a wonderful tool and system that has given my money purpose, given me clear line of sight, that has brought peace of mind, and allows me to receive more and more. In this system, everything has a purpose, it’s not hoarded, so you can then attract more of what you want in your life and business. 

The other reason I love Profit First is that it creates boundaries. It works as a set of guard rails for how you run business, what’s ok and what’s not.

With the way the system is set up, you see “warning lights” when something is amiss, something you can’t really do with traditional accounting. As a business owner, a CEO, someone with a small team, you need to quickly understand what’s happening with your money and have confidence in it. 

Having command over your money will serve you in your entire life, Profit First gives you a language for money and opens up doors and ways of thinking about money differently.

So that sets the stage. I use Profit First in my business, and have for years, but this year I got screwed up with money, and now I’m getting out of it. 

As I share this to be truly transparent, I also want to acknowledge that there are many people sharing their income online, lots of people are talking about how much they make, and not only is that often fake, it’s also dangerous. I caution you to not publish what you make online, from an IRS, legal, and safety perspective. Obviously, I’m not a lawyer, but it can be dangerous to share that type of information. 

So without sharing my exact income, what you need to know is that a few months ago I did my money allocations (I teach how to do this inside The Bold Profit Academy) where I transfer money from my revenue account to other accounts that need that money, and I didn’t have as much revenue as I thought I was supposed to have. 

We had just started running new payment plans and had some new systems, but after talking to my team, we determined it was just due to the timing of payments and everything was fine, this was just a hiccup. Fast forward through 3 months, and the same pattern continues – I go to do my allocations, I have less revenue than I expect, I talk to my team about it, we determine there isn’t a real issue. In fact, my CFO brings me in to talk cash flow, but he comes at it from an accounting perspective and we look fine in that sense. I have cash, it’s just allocated differently than I was planning.   

Now we’re to the point where I’m still not seeing the revenue I think is supposed to be there, and I’m having to dip into other accounts to cover expenses. I’m not panicking over this, we have the cash, but it doesn’t feel good, I know something’s off. 

Then some information comes to light, and as I share this experience, if you are one of the clients who experienced this, please know that I love you, I appreciate you, there is no animosity here, but I need to use this as a business lesson for others. So what had happened was that a couple of payments didn’t go through from clients and the two-step process we have to ensure this doesn’t happen failed. Two separate processes we have, broke down. This is what happens in a business, it’s not perfect, it’s a mess, it’s not about getting it right, it’s about being agile, iterating, having systems to support you, and adapting. 

So we have failed payments, that sucks because: 

1. If I have a client have a payment fail I like to talk to them immediately about that, because it could be a sign of something else. Of course it could be that they changed cards, but often it can be a sign of something else, something we should talk about. 

2. That is a costly mistake. It’s taken me and my team lots of time to talk to people about this, fix the system and the errors we made and that the client didn’t catch. It’s all a costly mistake. 

One of the lessons here for you is this: Mistakes cost money. You will make mistakes. You will make mistakes that cost money. You will make mistakes that impact other people. We have to all take accountability for the mistakes we make and just learn from them. 

So we realized we weren’t collecting payments in the way we were supposed to and that had a tremendous impact on cash flow this month. Now I’m sitting here trying to figure out what I have coming in and what’s going out. I have people I need to  pay, I have a team, I have responsibilities. When I see the mess we have created, I have concern about paying them, and I get joy in paying them. 

The point is, when we break contracts, there is an ecosystem that quakes afterwards, so we all have to be conscious in this small business space. 

Now, here’s what I want you to takeaway from this mistake that’s occurring in my business: 

  1. You are not seeing reality in the online space about what happens in people’s businesses. If you need a dose of reality, message me – I’m surrounded by business. My own, my clients’, my husband has a business, my father and grandfather had businesses, I have many family members and friends with businesses, I’m happy to share with you the absolute truths of what it’s like to run a business, and that’s not what you are seeing online.
  1. If you see people putting their income reports online, don’t follow them in this trend, it’s just not safe for you or your business. 
  1. I have been doing Profit First since 2016, I have been working on my money mindset since 2005, I consider myself an experienced money manager, I love investing, I love money, and I made a mess. It’s ok. This is what we do. If you are looking at your own stuff, don’t be ashamed or embarrassed, we all do it, we all make mistakes. We are never going to get it all right. 

I meet so many women who are afraid to come in The Bold Profit Academy because they think they are too far behind or will be seen in a bad light, but we are all putting our pants on one leg at a time. If I’ve learned anything over the last 7 years of coaching, it’s that we’re all doing the same thing, no matter how big a company or persona looks, how important they seem to be, how serious looking a business is – we all need support and help. 

One of the best places to start is using a system like Profit First to support you. It puts boundaries and a system around us and our business and money that gives us guard rails. If I hadn’t had warning signs like I did this year from this system, a mistake like this could put us out of business. 

I share this all because we have to be able to advocate for our money. We have to understand our money and have systems that support that. And I want you to know that if you feel you don’t have it figured out or you are making mistakes, we all are. It’s what you do with the lessons from those mistakes that matters. 

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