How to Manage Cash Flow Through Uncertainty
Well as your company grows or looks to save money especially people expenses. It's always good to look at the best tools and process run your business. The right tools and processes can help you either scale, your business, or running more profitably hit help and Tony Ward with the President of zero for the Americas. He has twenty years of experience in senior leadership positions with global technology companies including Microsoft Australia linked in spark, serving monkey and dropbox Tony Welcome to the show. Bearing talking. So first of all, tell me how you doing doing this pandemic you and your family. Yeah, it's actually we moved here from Australia in January? So my twelve year old my wife Celts in. I would say, pretty easily the worst time deposits. Hundred Years So. One Thousand Nine Hundred Eighteen Exactly, it's all upside from your very I would agree with that. Well, a lot of small business owners right now are trying to figure out how they can more effectively run their business with better prices with cost-saving apps where do you start? On The first thing I would say is that cloud technology I think has been we'll be seemed to be a real. Savior for a lot of businesses particularly through coded and. I give you an example I think everything from the front end of Your Business. So you know looking appointments things like timely. I can see a of people using figuring out new ways to market their business like your facebook and Google. In fact, if you'll get facebook's recent results that added a million new advertisers, a lot of those are going to be small businesses trying to figure out how to get more people in the door and then things like zero put back. Then to figure out what is actually going with your business and I know everyone is all talks about Cash is king and casual super important. But when you have a shoebox little receipts, it's very difficult to figure out what's happening with cash flow. So and I, kind of you don't running out of cash is almost like. An Iceberg and the sooner you could see coming the sooner you can potentially avoid it and so things like that. Help you do that are really really important always. But in this time, even more important to figure out what's going on your business and just automate as much as you possibly can to free free up your time to work on the business versus in business I think too many small businesses. Honesty that they're gonNA try diy everything and there are certain pieces of software that you can use action at free up to do things in your business. So Tony and your point of view where you actually start because I always say that you can't do everything at one time. What's really the tip of the spear? We'll the first thing that I would do, and this is a really interesting stat when you compare the US versus other markets that were unlike strapping young candidate UK in the US around thirty only thirty percent of small businesses have an accountant or bookkeeper. It's very much a diy mentality and what I would say to people is look we we get personal trainers we get coaching all the time and our daily lives. Yes. Seventy presenting small businesses don't have a coach don't have someone to go to and really talk about their business. And when you think about it, it's a lot of small businesses of debt their house on their business yet they don't necessarily see the value or having thought about getting our coach. So I would say getting a calendar bookkeeper, get a businesses visor it's going to be the best money era we're GONNA stand. So let me ask you a question about that. Why don't people do that? Because I agree with you so many people have no idea what's financially going their business why don't they take that step? Is it that they don't think they need it or they don't want to know what's really going on. Inching. Research over the last six months in their research. It's something to do the pioneering spirit of America where people believe I can do myself do it yourself and what we're trying to say, we tried to move people from Diy d I t do it together and so our research shows us that if A small business ties zero, and they're using an accountant bookkeeper, their survival rates, Shuki sixty percent higher over five years so. Logically. You think I should do that I think part of it is people get so passionate about their dream of writing because they just get into it and usually take some sort of compelling events tax issues or whatever, and when the most secret lies are I would think you know. Clan up from what you're GONNA do and you're probably enemy our data shows you can be more successful Malaga. So that's the first thing I do. Then you're kind of bookkeepers probably GONNA look how you're running your business and and work out with software like zero and others where you making money where you're losing money record to save money. You know and right now what you should be doing is you know renegotiating with your landlord if you can't if you have physical space figuring out of their other avenues, other ways, you can actually get your product to market that maybe aren't a traditional retail sense. So you seeing things like shop with Wind Amazon just explode 'cause you know businesses are trying to figure out how can I sell more product or service in the virtual world because physical world is so challenge that Obama. Tony I wonder if these are the same people that don't balance their checkbook. I don't have the date on that, but you'd argue, yes, I think that's probably true. You know what? They say the penny look after the pennies. The dog themselves. So yeah to it's probably reasonable. It's because we're not really taught these kind of financial concepts in school. Actually it's hard to understand what the profit and loss statement says. The balance sheet says the cash flow statement says and many times there with the wrong accountant that really doesn't take time to explain to them. So they kind of keep their distance from this stuff. I think it's been a chicken and egg I think a lot of our accounts into the paper is there really they want to get into advisory services? That's all they see the growth and Really are passionate about the small businesses that they look after. Talking to some of our Council peepers, curious cove experience, they're really struggling because they're talking to small businesses who are potentially business potentially losing her house. So I think small accountants want to do this, but they kind of need to be invited into the Party needs created a couple of products lately to try to help on accounts to give a reason to actually have that conversation. So something called the business sack shot thirty castles state and our new. Features inside zero where you can literally see in real time what's going on in your business and the thirty day cash will actually give you some insights as the white new should do Ingram plain English for a small business like collect these bills. Hey, this you're gonNA run into cash unless you collect these deals unless you delayed payment of these other bills so. And one thing zero does really really. Well as we we talk in Layman's terms. I think about my Mama's a hairdresser right Sheila Ramos along for twenty five years. She didn't get a peer now or anything like that. Say we use terms like money owed money owing inside zero because like okay I kind of that because I get money all money that's oats me I don't really get profit and loss credits and debits into council I think. Financial Literacy to your point area in small business is is not great because people just want my mum's London runner hairdressing Salon. She didn't WanNa do the books and I think making it easier for people to run their business and having software advisers that that do the boring accounting stuff is really critical to successively small. Wanted to brag about financial literacy because when I sold my last business in one, thousand, nine, hundred, nine told this toward many times before I lost a million dollars off the sale of the company because I send my balance sheet nine MBA for northwestern university. So that's nothing to be proud of. It's it's really really challenging running a small business. You brand businesses I've had small businesses you spend so much of your time and effort certainly some people think are GonNa start a cafe a lifestyle. It's a lifestyle business. Alright sixty seventy, eighty hours. It's it's really really challenging. So anything that software due. To free up some your time to have more time with your family or to grow your businesses is really what we're trying to achieve. This idea of the three day cash flow because again, every business goes out of business. The exact same reason they run out of money and during the recession cash definitely slows down what suggestions would you have for small business owners for managing their cash flow during this period of time. The first thing I would do I would be really really hard core on any money that's actually ot you to collect that to be the squeaky wheel because a squeaky wheel gets the oil in this where we are right now there's a lot of money owed and certainly there are the ones that are actually really persists. are the ones that are going to get it. I'm I would be as I said before I be trying to renegotiate any kind of a large expenses that I have either get more favorable terms or reduction in order to protect your cash flow and then I would be thinking really creatively how I could get on routes to market for my product or service. So if I could I sell more online, there's really creative things that people are doing like I was talking to somebody today who they got a haircut for the first time in you know since March since the lockdown started. Your hairdresser had a physical salon. She wasn't able to have people in anymore. So she was literally going to people's houses and she said now that she probably wasn't going to reopen her physical business that this is really going to be the future of her business and then she was selling product, which you know is generally high margin she had that on. A website where she was promoting products and All the same time. I think you're gonNA see more and more of that sort of creativity. My Wife's still you know getting a personal trainer she's doing it over soon call right so she's not physically going to see this personal trainer personal trainers still making money, but they're doing it over in know a virtual environment versus a physical environment. It's really amazing because there are things that we're doing now that we never thought could be done remotely like my wife again, it's teaching Yoga classes remotely and I'm taking karate class remotely. It's really quite amazing what you can get used to. Yeah I just think it's the Sunders. Certain the research that we have is they're growing they're actually seeing this as as an opportunity and you know there are other business I really feel for you know Pasta Taliban businesses retell the that are doing it really really tough with someone are figuring out new channels new ways to do. So for sure there's GonNa be winners and losers. Like. There isn't every single economic downturn. Feel like it's kind of like a game of musical chairs things are going well in the economy. Excuse me. Things are going well in the economy and all of a sudden the music stops you don't know if you're gonNA have a chair. Yeah and I think you know the really smart service savvy entrepreneurs out. There are going to figure out ways to be successful, and there's going to be just like integrates recession. This is going to be a whole bunch of starting the kind of the hypothesis that we haggas. Particularly millennials every Neil you talked to, you seems to have some side side-hustle right and what's happening is is a lot of people are losing their their jobs, their side hustles becoming their main hustle. So you're gonNA see a whole bunch of new businesses come out of this, and some of them will be really successful on some will some won't make it, but you're definitely seeing green shoots in new businesses starting out. When should people actually choose zero? Of course the elephant in the room is always quickbooks. Why do people choose zero over quick? Book Solutions. I think one of the main reasons they choose it is very easy to use. It's very simple. It's very non accounting language. It was you know we created the category of small business cloud accounting. So we we don't have a desktop business we've always just had a class business so. It's it's built for the cloud doesn't it's not coming from the desktop and moving to the cloud. So I think ease of use. And just. Talked about being Hashtag. Beautiful. It's really nice piece of software to use very intuitive. and. One of the things I find that small business owners make as far as mistake is they don't set up a separate accounting system for their business. They just do it as an extension of their personal accounting system, which really is a problem. Yeah sickly sole-traders when they start out a lot of rooms are mixed kind of discolored business and pleasure or their personal encounter banking account. I would say that that is you know five starting a business. The first thing I do is I would set up a business bank account right and I would basically get some sort of accounting software whether it's you know zero or what have you I would look for the line of business software that is kind of the market leader in the category that I in. So you know in construction, they'd be Pro Gore finding you know running a hair salon. Be Timely find getting all my kind of soft were sorted out, and then I would find a really great accountable infect around flights ten percent of our accountable keeper channel. The people that are zero advisers are almost acting like managed service providers were there. Basically providing a stack of software plus advisory services to small businesses for a monthly fee. So the small business doesn't need to worry about. Well, what should I choose choose? Their their adviser is basically saying if you're in this particular industry, this is the the bundle of software that you need to run your business and all manage it all, and I'll help you with coaching. You run your business and I want everyone to hear what Tony is saying because to many times we don't spend any time setting up the infrastructure for our company and that's really easy these days with these cloud. APPS Tony. It's interesting. You know long time ago when Islands University announced doing. It. Guidance was eighty percent of your time. You're doing it should be planning twenty percent doing and I don't think that's much different for business I think, generally some small. Rush out and getting to it, and they don't think about the planning side of it. But if you don't build the foundations thinking about building a house with the foundation isn't rock-solid. You know, how are you going to build that twenty story building? If you have aspirations to grow your business, you gotta get the foundations down. You GotTa get a coach just set it up right from the start in your our research shows you're going to drastically improve your chances of being successful. We'll Tony I appreciate you joining the show where can people get more information about and that's spelled x. e zero? Zero DOT COM and check it out. There's you can get on there for a free trial and. I hope everyone loves it up everyone stay safe I. Hope all the small businesses out there. I know you're doing itself. We're here to help. Just, take care good life and. Hope you're joining continues to grow.