Episode Transcript

Michael Abernathy 0:00
Hey what’s up? What’s up? What’s up everybody? Welcome back to THE a.m and welcome back to five minute rants. I’m your host, Michael Abernathy. And today I have a special guest with me Joseph Powell from Bubble Rock Advisors. Joseph, welcome to the show, man.

Joseph Powell 0:23
Yeah, great to be here. Thanks for having me.

Michael Abernathy 0:25
You’re welcome. How you been doing?

Joseph Powell 0:27
Pretty good.

Michael Abernathy 0:28
Well, Joseph, before the show, we talked about looking at the numbers. And can we delve into that more?

Joseph Powell 0:36
Yeah, so I help small business owners increase profits, and gain efficiencies. And I start by having them look at the numbers but most small business owners don’t. You said in an earlier podcast that you recommend people get their numbers every week for accountability and I agree 110%.

Michael Abernathy 1:08
So I got it right.

Joseph Powell 1:09
You hit the nail in the head. I like to take it a step further and start with not just Looking at the numbers. Are the numbers that you’re looking are right? Can you rely on them? Once you can rely on them Are you looking at the right numbers? I start there, and then I go into cash flow. And most most small, small business owners don’t understand cash flow and I like to introduce that to them

Michael Abernathy 1:41
that’s cool. I mean, that’s so good. Joseph, because you talked about, are you looking at the right numbers I think that’s really important. Because just because you have numbers in front of you doesn’t mean they’re going to tell you What you need to know. Can you talk about to like why cashflow is important? Just I mean, I know that maybe a lot of people listening might know, but a lot of people who don’t. Can you kind of talk about that and why it’s important What it actually tells you in a business.

Joseph Powell 2:05
Yeah, most most business owners do what’s called bank balance accounting. You know, they look at their bank account, they say, Oh, I’ve got $2,000 in the bank, I’m doing good.

Michael Abernathy 2:17
That’s so true.

Joseph Powell 2:19
Buy the new gadget, or

Michael Abernathy 2:20
I have done that.

Joseph Powell 2:22
Yeah. I like to run statement of cash flows for clients, no matter their size, just because you need to know, you need to know what’s coming in what’s going out how much cash is on hand, and at What time. The goal with cash flow management, in the simplest terms, is when customers are paying you, you want that money fast. And when you’re paying somebody you ideally want to hang on to it as long as you can. So we look at that, and ways to make that effective.

Michael Abernathy 2:58
That’s cool. That’s really cool. Real quick to use, saying that, like the bank balance, you know, banking, a lot of small business owners, like I’ve said, I’ve done that, What would be a good first step for somebody to get started to actually find the real numbers to find What they need to do for accounting and money. And to get squared away, What are like three tips you would offer them to get started out of the gate?

Joseph Powell 3:21
The very first thing and I mean, the basis of of all accounting, and, you know, even forward looking finance, however complex you want to get it all starts with basic bookkeeping, the chart of accounts, which, you know, keeping it very simple, a lot of people don’t know What that is a chart of accounts, lists, every account that you that you use, and you know What, What type of account it is, is it a liability? Or is it an asset? Or is an expense? Is that a revenue item? So making sure that the Chart of Accounts aligns to your business, are you representing cost of goods sold If you’re a manufacturer? Do your Chart of Accounts line up? Are you looking maybe you have different service lines or or divisions? Are you tracking by service line? Are you just throwing all your revenue in one account and all your expenses in another? That’s, that’s that’s really the main the very first step is is making sure that your bookkeeping is clean. Yeah, beyond that, there’s there’s you know, simple simple tools. And honestly, most, most banks, most business banks have a cash flow tool in their app. If you can start as simple as that. I mean, other than that, you can call somebody like me and we’ll be glad to help you organize your cash flow and reportings.

Michael Abernathy 4:55
And you saying that too, just real quick because we’re about to close. Joseph is awesome. So Joseph, like What he does is he specifically comes into companies, creates efficiencies and pretty much maps out all the money and roadmaps for larger companies and businesses. And so I’m just saying this if you guys listened to Joseph just given some pro tips for getting started, but he is, this is his art and his craft. Just saying that out there. I probably should have shipped this upfront now that I’m saying it.

Joseph Powell 5:29
Well it sounded really good when you say it

Michael Abernathy 5:34
well, we are way over. We’re 35 seconds over so thanks for coming, Joseph. I really appreciate it man. I really do thank you for taking the time.

Joseph Powell 5:44
Thanks for having me.

Michael Abernathy 5:45
Welcome. And guys, I’ll catch you on the flip side. Peace