What to Do When You Don’t Have a “Vin Man” Running Your Business Finances…
- By Sara Brennan
- December 10, 2019
Who is this “Vin-Man”?
Like many of us, I don’t have a “Vin Man” in my small business. And just in case you aren’t familiar with this very “LuAnn” term—it’s a person in your business who is in charge (and completely obsessed) with the financial health of your company.
You know: That spreadsheet-creating, statement-analyzing, “how-can-we-do-this-more-more-cost-effective” person who knows the ins and outs of your company numbers.
The term, “Vin Man” came to be when LuAnn would lovingly refer to her numbers-savvy husband, Vincent Nigara, on multiple podcasts in a discussion about bookkeeping, accounting, goal setting and profits.
LuAnn admits she does not handle this aspect of the business (if you’re a regular listener, you know she does not “do numbers”), but Vin does and she’s often commenting about how lucky she is to have him and how vital this role is to a small business’s success.
Vin and LuAnn Nigara at The Power Talk Friday Tour
Three Steps to Financial Success
Many of us wish we too had our own “Vin Man”, but rarely is that the case. Heck, who am I kidding, we are lucky if we have a bookkeeper in the early stages, right? But I’m here to tell you in three “steps” what I did as a #babydesigner and how I managed to succeed without a “Vin Man”.
I’ll start by saying that this was not something I did out of the gate.
I learned some hard lessons within my first year of business that taught me the importance of figuring out my numbers, settings goals and bringing in profits and I KNEW—going into my second year of business—that I would not go another year without making the kind of money I knew I was worth.
Step 1: Get a Bookkeeper
Yep. I am a student of LuAnn and in her book, she tells us your first hire should be your bookkeeper, so that’s what I did. It sounds super basic, but that’s because it is. I could not set goals or review my company finances if I did not have some kind of organized way to show my sales, COGS (cost of goods sold) and expenses.
And for those of you who think you have it together without a bookkeeper—NO an excel spreadsheet and a shoebox of receipts won’t work! My bookkeeper guided me through setting up my QuickBooks, naming my categories, inputing clients, etc. and depending on how long you’ve been in business, this process can be very quick or very lengthy.
If things are busy and complicated, you’ll have a lot of work to do, but the good thing is that your bookkeeper should know exactly how to guide you through this whole process. And it’s also reason enough to start this whole process as early as you can when things aren’t too crazy (or messy) yet.
Your bookkeeper’s goal should be to get to a point where YOU can evaluate your finances on a yearly, monthly or daily basis, which is exactly what you want. I emphasize the “you” because having a bookkeeper does not mean that you hand off your “numbers” to the bookkeeper and never look back; you really need to stay involved in the finances as often as you can. You will want to track, set and achieve goals (and make sure no one is stealing from you, let’s be serious).
It’s your company. You decided to put your name on the door, so this means you need to look at more than just the “pretty” in your design firm.
Step 2: Review Reports with a Financial Coach
Once I had everything organized and digestible, I did not like what I saw. I wasn’t making very much money—bummer. BIG bummer. I worked my ass off and, after paying all of my bills, I didn’t even have enough to pay myself. That was the end of that. I booked a phone call with a financial coach, Michele Williams (episodes 137, 180, 395) and took the bull by the horns.
She recommended I implement Profit First (which I did), and Michele evaluated my business financials (the good, the bad and the ugly) and on our call—in December 2018—we got REAL with what I really wanted and how I was going to get there. At that moment I had a plan, a recipe to the financial success I wanted to have. Now I just needed to make it happen in 2019.
A financial plan was exactly what I needed. We broke down a yearly sales goal along with quarterly and monthly goals. We determined how many “big” projects I had to do in a year and how many consults I should try to weave in on a weekly/monthly basis.
I also learned how much I could afford to outsource, which was incredible because I was operating out of fear prior to this conversation. Can I afford to hire? Part-time or Full-time? How many hours per week, at what rate?
It was stressful and very unclear before my call with Michele, but after, I knew what I could afford, how to break it down and I suddenly became confident about something I was so nervous about!
I remember as soon as I hung up, I went straight to one of the designer Facebook groups (sorry, I can’t remember which one) and declared that 2019 was going to be my year and thanks to the help from my financial coach, it was. As of last week, my firm met both our sales and profit goals for 2019 and we all celebrated a year of hard work and financial success (sorry to brag, but it felt AMAZING)!
Step 3: Create A Long Term Plan
Okay, so I got a bookkeeper, I understand and review my finances regularly, I set and met my goals and paid myself what I know I’m worth. Now what? You can’t just press play and repeat, you must reevaluate and get clear on what you want going forward, what has changed and how you are going to do it again.
Did you save enough for taxes? Do you want to grow a bigger team? Maybe you want more product sales or profits. Or maybe you met all of your goals, but it was HELL doing it and you’re thinking of scaling back. Whatever the case, you need to sit down and look at your previous year’s finances to be able to move forward and then figure out a plan.
Depending on your firm’s size and pace, a bookkeeper may work on a part-time basis for you, but you may need to consider hiring someone full-time. Also, who is paying your sales tax each month and calculating and forecasting your income taxes?
You may also be looking to hire (more) employees or other independent contractors, but I can guarantee you that you’ll have questions along the way. Is your accountant available to you regularly? Do you have someone who can serve as your financial advisor for your business when you have ideas you’d like to talk through? These are questions you should think about when looking ahead at your next year.
There are coaches and professionals that offer services like this and I recommend you look into them so that you aren’t scrambling when these things come up. Peter Lang, the Designer CPA, (episodes 349 and 464) is a professional who is industry-specific and can help you navigate through financial conversations within your business.
Reach out to these types of professionals as early as you can. You don’t necessarily need to hire them right now, but you should at least know who you can call, should something come up. I personally use someone who serves as my CFO, accountant, and bookkeeper, which is absolutely amazing, and we have monthly meetings to discuss my financials. She has a monthly subscription model called “My CFO” and I’m finding it to be fantastic for my business.
Kimberly Merlitti, of KMM Consulting, (episodes 361 and 442) offers something very similar to this and you can hear her and LuAnn discuss the power of this model on A Well Designed Business® – let me tell you it really does work! When I need to consult with someone on hiring, expenses, or taxes, my CFO is there to guide me.
I feel like I have someone who is totally on my team and onboard with the success of my company, not someone who just looks at my numbers. Although her services are not in-house or on-demand, she’s available by appointment when I need her professional advice and it works perfectly for me!
If You Have Time for Instagram, You Have Time For QuickBooks
Although I don’t have a “Vin Man” in my business, I found a way to ensure my financial success with eyes wide open. With the Profit First method and some coaching, I knew what my business could and could not afford and planned accordingly; I didn’t guess at anything.
I know my numbers inside and out and feel pretty badass about it. I also took home a six-figure income that I am very proud of and know I deserve. Notice how I didn’t just hand off my numbers to someone. I’m still involved in each and every transaction that goes through my firm and money never gets moved without me knowing it.
I’ve heard countless stories about mistrust and stealing and I’m so thankful for those who have shared because I can tell you, that won’t be me. Because of stories I’ve heard on LuAnn’s podcast and at her live events, I know I have to find a way to make time for my financials. The way I look at it is this: If you have time for Instagram, you have time for QuickBooks.
I’ll say it again, if you have time for Instagram, you have time for QuickBooks. Get the app on your phone, check it daily, get a bookkeeper, get a plan and get it together. You deserve to be compensated for your time and your value. Make a plan to make that happen in 2020 just like I did in 2019.
How Well Do You Know Your Numbers?
And lastly, if you are reading this and can’t rattle off your top line and bottom line for the last month or year, you don’t know your “cost to be open number” (another Vin Man term) and you don’t know your COGS and expenses and you “think” you have a successful firm… stop. Stop right there. Do what it takes to KNOW you are successful and then come back and report how stellar you are doing with confidence.
That’s when you’ll finally feel that scary and stressful weight being lifted off of your shoulders and see that this is well and truly a business you are running, not an “I’m so good at this decorating stuff, I feel bad charging for my time” hobby. Right?
I want you to have the success that I’ve had in implementing these steps, which is why I’m sharing this with you today. If you have any questions, please reach out. If you need help, ask for it. There is no shame in doing what it takes to know and understand your business.
The questions you have aren’t silly or stupid. They’re awesome! They’re awesome because that means you are doing what it takes to run your firm like a boss. I look forward to hearing your success stories and how you too crushed your goals and earned the type of money you dream of making.
Show up in 2020 and be excellent.
Katherine(16 December 2019)
Thank you for this!!! This information was right on time for me as I head into the new year. I just started reading Profit First and I’m looking forward to incorporating Mike’s model into my business. I will be contacting a Bookkeeper, Accountant, and CPA this month. Wooooo-hoooo!!
Sara Brennan(16 December 2019)
Yes, Katherine!! This makes me so happy to hear that you are taking control of your finances!! Look at you soaring into 2020 already!!!
Heather(30 December 2019)
This blog post came at a perfect time. I had what I feel is a successful year, but I could not answer the questions you posed!!
I have some podcasts I am going to listen to and I am signed up for your process leads to profits and very much looking forward to it!!
Quick question for you regarding bookkeeper, did you interview several? or how did you choose your bookkeeper?
Sara Brennan(12 January 2020)
I’m glad I was able to help you see that you need to find additional clarity regarding your business finances. It can be hard because sometimes we don’t know what we don’t know, right? I’m so happy to have you in Process Leads to Profits, it’s going to be great and propel you to success in 2020!!
To answer your questions about bookkeepers, I’ve had two and both of them came from strong referrals from colleagues I had trust in. I did speak to them regarding my situation and how they worked, but I wasn’t really taking a shot in the dark either. I hope that helps.