Kim Fredrich 00:03
Hi, I’m Kim Fredrich, the CEO and Founder of The Ventas Group. And I’m back again with another Surprising Sales Tips. Joining me today is Michelle Burke of Health and Taxes. Sounds interesting, doesn’t it?
Kim Fredrich 00:17
So I’m delighted to introduce Michelle, because I just love the way she’s combined two things that don’t normally go together. So Michelle is a very vastly experienced CPA with more years than she probably cares to admit, working with big accounting firms, who said, “Enough of that, I’m going to now work with entrepreneurs and small businesses.” And because she so strongly believes that personal health is so critical to business health, this is why she’s talking about health and taxes. And what’s funny is she’s mostly working with entrepreneurs that are in the health and wellness space! But that doesn’t mean that’s all that she can help. So I’m going to turn it over to you, Michelle, I’m going to ask you, what is your top tip for increasing sales?
Michelle Burke 01:04
Hi, Kim, thanks so much for having me here. Really appreciate it. My top tip to entrepreneurs is having some basic understanding of your financial statements. So thinking about your income statement, you’ve got your revenues, and then you have your expenses. Just keep it that simple.
Michelle Burke 01:25
In those expenses, you have fixed expenses, maybe you have rent, maybe you have certain things that you pay every single month. And you know what those are. You also have variable expenses – how much are you spending on marketing this month? Sometimes that’s fixed, but usually variable. So a lot of different variable expenses.
Michelle Burke 01:25
I suggest that business owners have a budget. Lay all those things out, like what costs do I need to cover for the year? That also includes a wage! A wage for yourself. A lot of business owners punt a wage down the road saying, hey, I’ll pay myself later. But you need to know, what do I need to live on? So put that wage in there, put those expenses in there?And then look, what is that total number? That is how much you need to just break even.
Kim Fredrich 02:22
In terms of sales you mean?
Michelle Burke 02:24
Kim Fredrich 02:25
So that’s the level of revenue you need to bring in to break even.
Michelle Burke 02:29
Yes, so if you want your business to grow, and remember, taxes. Now, maybe you know, you’re operating at a loss or you’ll generate a tax loss. But you also have not only income taxes, but you have sales tax, maybe some property tax, depending on what type of business that you have, payroll taxes, so make sure you’re thinking about those things.
Michelle Burke 02:30
So my tip is if you kind of have a basic understanding and lay out, what is my financial picture, what do I think it’s going to look like? And then what does that mean in terms of sales? How am I pricing myself? How much do I need to sell to get that base level? And then maybe say, here’s ideally, how much profit I’d like. And here’s my stretch goal or something, but really, that would be my tip, really having some understanding of numbers, of what they look like.
Michelle Burke 03:24
And then of course, comparing as you go along during the year, what that budget looks like, versus your actual, is that really tracking? Is it realistic and things like that. But that would be my tip for from kind of a financial perspective on how to be thinking about, what do I need to be bringing in for sales? And how do I go about it?
Kim Fredrich 03:44
Well, and I love that you said, there’s obviously there’s the breakeven, then there’s the enough to pay yourself, and then there’s sort of, you know, the reach, the stretch, which is where you’re like, wow, I can maybe actually pay myself pretty well, or I can maybe invest more in the business.
Kim Fredrich 03:59
So actually, while you were talking, I was thinking about that Michelle. From a financial perspective, is it advisable to look at that number you need and say, okay, in order to achieve that number, I’m going to have to invest and actually spend some money, like you know, that famous “spend money to make money”. So do you recommend that a business owner incorporates that into expenses or says, well, I’ve got to just spend it otherwise I’ll never reached that number in terms of revenue. Or what do you suggest? Be cautious or like jump in and go, “I need to invest in order to get the numbers I need?
Michelle Burke 04:42
Yeah, it all depends. And so when you’re starting out, obviously, you’re gonna have lower sales and you really need certain things, you need to invest in yourself and you need to have these things but still plan that out. You know, I might have a loss during this time and still pay yourself during that period. Right?
Kim Fredrich 05:03
And that’s actually important, isn’t it? Because so many entrepreneurs don’t pay themselves.
Michelle Burke 05:09
Yeah. And they think that someday they will. But then the someday never happens. So really build it in. So yeah, you if you’re in your initial years you need it, and sometimes during a growth spurt, but just be aware and track what those are, and where you’re at. So you say, you know, okay, I’m going to take this class this year, but I can’t also take that class or do this as well. And so at least you have some idea of where you are. So at the end of the year, you’re not like, okay, I did make all this money. But then I had all these expenses, so I didn’t make any money. And wait, you’re telling me I still owe tax? How can that be? Right?
Kim Fredrich 05:46
That’s an unpleasant surprise isn’t it?
Michelle Burke 05:48
We don’t want that.
Kim Fredrich 05:50
Yeah. Well, that’s really great. And I really love how you have emphasized how important it is to pay yourself. I mean, I’m certainly guilty of this myself, I do pay myself, but I haven’t made it a priority. It’s typically been whatever’s left over at the end. And that’s, I know, I know, that’s not the right way to do things. So, yes, we all need people like you, Michelle, to kick us up the backside and say, you got to do it better than that, you need to allow for that in your calculations and monitoring those financial aspects.
Kim Fredrich 06:24
So, Michelle, thank you so much. I mean, these are maybe not things we haven’t heard before. But it’s so good to just be reminded of why we need to be paying attention to these things, because healthy businesses are the ones that are being successful, aren’t they? And that allows your business owner to be a little healthier, hopefully too, because they’re not worrying. So thank you so much, Michelle, if somebody wanted to reach out to you and connect with you, what would be the best way to do that?
Michelle Burke 06:54
Yeah, the best way to reach me is really through my email. And that is email@example.com. Dot net, not dot com. But yeah, just send me an email and we’ll go from there.
Kim Fredrich 07:16
Perfect. Well, I will link to that in the transcription from today. And again, Michelle, thank you so much for joining me for another one of our surprising sales tip series. Take care. Thank you. Bye bye
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