The One Where We Don't Crash
How much cash do you think a business should keep on hand?
Clients want to know this.
But if you have your own bookkeeping firm, you also have to make that decision for yourself.
I made a video on my (other, client-facing) YouTube channel to capture my thoughts on how to decide on the minimum level of cash a business should aim to keep in the bank.
Watch that full video, but here is the gist. If you have $0, your business is dead. Crashed and burned.
Now, some you may know that I am married to a (wonderful, kind, and smoking hot) TOPGUN fighter pilot. So I know a thing or two about flying. And when does a fighter pilot crash and burn? When he hits an altitude of 0 ft.
So fighter pilots train a lot. A LOT. When they aren't deployed, all they do is train. They just practice flying missions over and over and over. And the way they safely train and hopefully not crash is they have an altimeter in their cockpit that they set where they tell the plane that their “ground” is 10,000 ft or 15,000 ft or any number they choose. This is called the “hard deck”.
They pretend that the ground is at 10,000 feet in the air.
So they take off and do their pretend missions and air-to-air dog fights, BUT, if they go below 10,000 feet, the plane alarm goes off to tell them that they hit their hard deck. They are “dead”.
But because they have set a fake 0, they don't actually die.
This is the concept I explained in the video I made for clients about cash reserves.
I think a key to a successful and low stress business is to build up cash reserves and set a number as your hard deck. A conservative number for your cash balance. Your fake $0.
If you go below that number, you go back to the hangar (a.k.a. your office or your couch) and do some serious soul searching.
What went wrong?
Where did your systems fail?
Where did you do an action that was beyond your own capabilities?
And even, should you keep operating?
For pilots, this decision of being “unsafe for flight” is typically made by someone else because these guys have personalities where they would not voluntarily remove themselves from flying.
Because if you had hit the real deck ($0 in your bank), your business would be dead. But by having a fake $0, you walk away in one piece. You can fix problems in a lower stress situation, or you can more gracefully wind down the operation instead of having your business just leave a huge path of destruction and wreckage behind it.
You know what else pilots have that helps them not crash? Flight Instructors! Seasoned pilots who have “Been There, Done That”. Every single thing they do in the jet, they first do it under the supervision of a flight instructor.
Rachel Barnett of Gentle Frog is kind of like a flight instructor for bookkeepers. She is running a group coaching program this summer. She has “been there, done that” when it comes to running a bookkeeping business and when it comes to bookkeeping (which are two different things, by the way). She is a Top 100 QuickBooksProAdvisor for the last 3 years. She has built a real bookkeeping business.
Will this be your summer when your business starts to soar? Bang the graphic for details. 👇
Deals Deals Deals
💰 5 Minute Bookkeeping is offering $20 of their Mastering Engagement Letters* course. Use code bshletters.
💰 GrowCon* will be in Jacksonville, Florida, on May 6-7. Use KJ200 for $200 off through April 14th or until tickets sell out!
💰 I wrangled a discount for The CFO Accelerator Live* conference in Dallas in May. 🤠 Use code HUSTLE. I’m going to this conference! Join me!
💰 Fast & Easy QBO has a $100 discount on their QBO Basic Certification course. Hurry. Ends March 31.
💰 Financial Cents is offering $100 off their practice management software with code FCFriends100. Expires March 30. If you are reading shortly after March 30, I’d just ask for $100.
💰 XeroCon will be in Nashville, TN, August 14-15. You can use code XCNASH24-first-access for $150 off your ticket to XeroCon through April 30. Hurry! Prices go up April 1!
Please always send me any news of deals that you hear of that others might benefit from.
Be There or Be Square
📅 +April 1 & 8: Co-working Hour. Begin the month on a good note and join the BSH Co-working Hour. RSVP to the FB event so you get a reminder! April 1 and April 8.
📅 +April 11: Sharpening Your Excel Skills For Bookkeepers. Come learn Excel tips and tricks for bookkeepers. Steve Chase of Sequentia Solutions is an excel genius and great instructor. He will share his favorite ways that he uses Excel in his bookkeeping business. I’m certain you’ll learn some trick that saves you a ton of time. RSVP HERE.
📅 April 2: Baby Got Backups: Backing Up QBO. Do your QuickBooks Online need to be backed up?! Yes, even though it's on the web, you still need to back up your business's data. This Royalwise course will look at several different backup and export strategies to choose which one is right for your needs. Register HERE.*
📅 +April 23: Homeschooling Bookkeepers. If being a homeschool family has ever crossed your mind, come join me as I interview a panel of 3 bookkeepers who also homeschool. RSVP and drop your questions HERE.
📅 +April 25: How To Get Started in Bookkeeping. Come join me for a 2nd Q&A session. This is a time for you to ask questions about starting your bookkeeping biz. You must register to join - I want everyone to feel safe asking their questions. (reminder: I WILL NOT be answering technical bookkeeping or software questions). Register HERE.
📅 May 15-17: The CFO Accelerator Live conference in Dallas*. Should I host a BSH meetup? Who else will be there? Let me know!
Featured Posts
🌶️ Joanna L. shared a PDF about S Corp Equity Section for LLCs. This is a great resource!
🌶️ Irena J. wants to know how do you handle it when a client wants to have a zoom meeting instead of responding to emails in writing (hint…having a bunch of zoom meetings with clients is a good way to be a broke bookkeeper). I added my thoughts (twice!). So did many others. What do you do?
🌶️ Christina D. shares that she has some springtime blues and blahs about her business. She is thinking about firing 50% of them. Do you find you have some regular seasons of different emotions about your business?
Help You Hustle
💪 Thanks again to The CFO Project for their instruction about How To Double Your Revenue Through Business Advisory Services.
Watch the replay.
Book a “Right Fit*” call.
Download the free 16 Drivers of Revenue, Profit, and Cash Flow guide.
I find the idea of having clients that pay those high prices extremely enticing. I’m over here with my business website that currently states the minimum monthly bookkeeping engagement is $349 per month and hourly FreshBooks training is $125 an hour. Feeling broke when I listen to the Business Advisory/Fractional CFO folks talk about their monthly fees between $1,500 and $5,000. Watch the replay and tell me how you feel afterwards. Does this seem like something you can add to your business?
💪 The voting for the Top 100 QuickBooks ProAdvisors is underway. There are many BSH Community Members on the list! Go vote for the people who have helped you the most. BUT, you know I always see things from a different angle. So here we go.
Social media stalk all these people. Why were they nominated in the first place? What makes them special and stand out? Connect with a few on LinkedIn (not too many or then you’ll send the wrong signal to the algorithms…you want to connect with prospects more than other accounting people).
This ballot also lets you vote for a category called “The Up-N-Coming” ProAdvisor award. If you are a budding bookkeeping entrepreneur who uses QBO, could that be you in the next year or two??? Go figure out what these awards are all about. Print out the ballot and tape it to your wall and stare at it every day as a reminder you want to be on this list one day..
For Fun
😹 The Bookkeeping Side Hustle community is still alive in the Accounting March Madness bracket. I’m bummed that The Accounting Cornerstone Foundation (my pride and joy) didn’t advance to the Sweet 16, but we definitely spread the word and I hope that everyone will support that organization next year.
But for this year, let’s keep the bookkeeping community marching on in the bracket! I’m up against the Bookkeeping Buds organization. I’m a huge fan of theirs. So no matter which of us wins this matchup, it is a win for bookkeepers everywhere.
Jobs
💼 Check out the BSH Job Opp Google sheet. Click HERE to see the new jobs added - including a part-time that doesn’t require experience. Be sure to use #jobopp when posting about jobs!
My Family Circus
New section of this newsletter for 2024. Completely non-bookkeeping related.
🎪 How we deal with eye rolls and disrespectful moans of disgust.
Every household is filled with menial, never-ceasing chores required to maintain basic functioning.
We’re talking washing dishes, picking up dog poop, mowing the lawn, folding clothes, taking out the trash, etc.
Of course no person always feels like doing what must be done. But feelings don't change the facts. The trash isn’t getting to the curb on its own.
So, in my house, if a child is asked to do something, ideally they do it cheerfully. But if a cheerful spirit cannot be conjured, they at least must do it without eye rolls or rude protests. They can keep those feelings to themselves.
A motto we have adopted is “We obey right away, with a good attitude, every day”.
To reinforce this lesson, if you roll your eyes or groan in rebellion, you just also earned that very task the next time it needs to be done. And if you protest that corrective punishment, you just bought that chore for yet a third time. Sometimes my children have bought 5-6 extra rounds of a chore before they realize mama is serious.
How do you deal with situations like this? Comment on Substack!
Kate Builds In Public
🎢 One day this week I had 4 back-to-back 1-on-1 FreshBooks trainings with clients. I am sure all of y'all are much smarter than me and realize that sounds like a terrible idea. But just in case someone just need to hear this, I 10 of 10 do not recommend having a 9:00, 10:00, 11:00, and 12:00 bookkeeping training. No matter how pitifully clients are begging for you because they have waited until the last minute for things. Don’t override your calendar meeting settings that you made when you were thinking straight.
🎢 I submitted all of our tax information to my tax pro this week. Did you know that I outsource my tax prep? Here is my story.
We did our own taxes up until 2020. But in 2020 My business made the election to become an S-corporation and at that moment I also hired tax help (we always self-prepared up until then).
I made about ~$70,000 that year and knew that bookkeeping firms could get Gusto* payroll for free, so it seemed like the additional hassle and cash costs of being an S-corp were outweighed by the tax savings that I would get. Hooray to meaningful tax savings! (please don't become an S-corp for just a small amount of tax savings. It is not worth the hassle or increased cost!)
I pay $1,200 ($100) a month and that gets our business and personal returns done. Our personal returns are not complex. We believe in the K.I.S.S. principle, even in building wealth. No tax shenanigans in the Johnson household. We don't want complexity in our life.
From The Vault
⚡ So, I just told you that enabling me to have time to drive my kids to all their activities was one of the most valuable parts of my biz. Check out this article from the newsletter archive where I told you about another valuable thing my business gives my family.
Classifieds (Clickable)
Want to have an ad in the Bookkeeping Side Hustle Pub? Click HERE for more info.
Keep hustling!
Kate
-Chief Hustler-
Thanks for reading The Bookkeeping Side Hustle Pub! Subscribe for free to receive new posts and support my work.
I am down right rabid about transparency and full disclosure. If a link has a * beside it, it means it is either an affiliate link where I might receive compensation if you make a purchase, at no additional charge to you. Or it could be a tracking link that another business provided me to see how many readers click on that link.