Trusted Profitability - Aimee LaLiberte

money profitability Jul 02, 2021
Mark Struczewski, Aimee LaLiberte

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Aimee LaLiberte is a trusted profitability advisor to six and seven‐figure business owners who are tired of being behind in their books and are ready to uncover blind spots, course correct, and ultimately get more profitable.

Her website

UNEDITED TRANSCRIPT

Mark Struczewski
Aimee LaLiberte is a trusted profitability advisor to six and seven-figure business owners who are tired of being behind in their books and are ready to uncover blind spots course correct, and ultimately get more profitable. Amy, welcome to the show.

Aimee LaLiberte
Thanks for having me, Mark. It's great to be here.

Mark Struczewski
Now, this is an audio-only podcast. But we are actually seeing each other on video right now. And I've got to tell you this listener, Amy is all dressed up and she says he dresses up every day for work. I'm kind of like a bum. I've been working from home since 2005. I'm wearing a sleeveless shirt. It gets hot here in Houston. So you won't get to see this. Because when I'm actually doing a live broadcast, I don't look like this. But I just thought I'd say I'm so appreciative that Amy dressed up and even did her hair for me. It didn't take much to do my hair. I have none. But I'm super excited that you're here. And we're going to talk about profitability.

Aimee LaLiberte
Thanks. No, it's great to be here. And yeah, I just I think everybody should do whatever they need to do to be most comfortable. So for me it is getting dressed, hair, makeup, the whole thing. I just like how I my energy when I'm all done up. So good for you. And for me, too.

Mark Struczewski
Yes, I love it. I love starting the conversation on a energetic Spark, if you will. So let's talk about profitability and business. So I want you to give us an introduction, I want you to imagine that there's someone listening to this conversation today. They go, What is she talking about? I'm an entrepreneur. So let's let's not assume because you know what to say about assuming, let's not assume anything, so why don't you give us a basic overview of what you mean by in profitability.

Aimee LaLiberte
Okay, so when you go into business, you go to, well, if you want profit, and you want to create profit, then you have a business that is a for-profit organization, right. And what happens is that many entrepreneurs go into business, and they want to create profit. And they find themselves making decisions, spending more money. And just creating a nonprofit business, not like a nonprofit as in like a nonprofit organization, but more of like having losses. And they find themselves in a cash crunch, a situation where they're just barely making payroll. And they're in this vicious cycle where they're required to do sales and sales. And they're the reasons for starting their business are become sort of secondary to the point of like, they just have to feed the cash monster in order to stay afloat. And that is not a profitable business, and a lot of different context. And so when I say I'm a profitability advisor, what I do is I help businesses reset, and focus and get back to the reason that they started this business in the first place, which is to be profitable, intentionally profitable.

Mark Struczewski
I remember and I don't remember how many years ago it was, when I found out that there's two numbers, people need to know when you're in business, gross profit, and net profit. Now, if you're grossing a million, but you're netting zero, that's not a good thing. So why don't you explain to us what is gross profit? And what is net profit?

Aimee LaLiberte
Sure. So just want to say something really quick before I go into that. So with revenue, I think that there's a lot of vanity like the vanity metric is revenue. So you know, people whether you want to strive to be a 678, whatever figure business owner that you want to be, I mean, that's great. You do you, but what I'm concerned about are is the net profit, but I'm going to tell you about gross profit in a second. So gross profit is revenue minus, what are the like cost of goods sold in order to deliver the product or the service? So think of things so depending on what type of business that you have? I like to say that, like I throw things in, like if you're an online business merchant processing fees, if you are a product-based business, it's the material costs associated with it. If you're a group practice, your therapist are part of your cost of goods sold because they are delivering the service. So So gross profit revenue, minus the cost of what it costs, what you are, how you need to spend the money in order to create the service or product, right. So gross profit is that then underneath gross profit, there's all your operating expenses. So think of things like software, if you have brick and mortar, so like occupancy cost and all of the utilities and that whole realm of it. So then you've got your gross profit, and then you minus your operating expenses, that is going to get you your net profit. And your net profit is what matters, because that tells us how profitable you are at the end of the day after you have created the income, and then spent the money in order to deliver the service, as well as to create the infrastructure of your operating business.

Mark Struczewski
I just learned something because I were talking about profitability here. And I was thinking, gross income. So gross income, you have 100 clients, they pay you $1 each, your gross income is $100. But you're talking about gross profits. So when you started talking about cost of goods, I'm like, Oh, I asked the wrong question. So gross profit is different than gross income? Yes. Oh, yeah. All right. Yeah, I'm probably not the only one that thinks that. I mean, I can't believe the you know, I'm the only person who's not doing this planet that did not know that. There's gross profit, there's gross income, there's gross, there's net profit, and then there's, is there something else is there a net income is? Well, I mean, I'm trying to get all these figures out in the open. So we all understand.

Aimee LaLiberte
Well your net income is, is the is is essentially your net income is your the the money that you have minus the expenses. So that part of it. But what's really important is that I think what happens a lot with businesses is that they when they start out, so I want to talk in like the most simplistic way. So let's just pretend that you're a service based business, that you're an online business, and you are selling something for $1, your course is $1. And then you somebody is paying you for it. And so you have a processing fee. So let's just say that that is like one cent for processing fee. And let's say that you have like they get a workbook from it. So let's say that that is one cent. So when you take the $1 minus the two cents for those two items, your gross profit is 98 cents. And so that of a percentage, you want to look at not only what that number is in terms of like a currency number, but then also what that percentage of income represents. Because that's really going to tell you like, Okay, do I like my profit percent, my gross profit percentage on that. And then underneath all of that, it's like, Okay, I'm going to I have a VA, I'm going to pay her five cents to do this. And then I have my software to deliver the online course. So that's going to be five cents, so then you go all the way down there. And then it's like 98 cents minus 10 cents for those two things, gets you to 88 cents. And again, that's your net profit. And again, the net profit as a percentage, you also want to figure that out. And that really matters, especially when it comes to like tax. When it comes to if you are not a corporation or identify as an S corp with the IRS like for us based businesses. That's the number that you as a LLC, sole proprietor disregarded entity with the IRS is eyes, that's where your taxes are going to come in. That's how they determine how much money you owe for taxes is on your net profit.

Mark Struczewski
So I as I'm listening to you talk here, and I really appreciate you breaking it down. Because I'm a big fan of simplicity. I don't want people to get lost. And I think the example you just gave made it really simple. But I gotta wonder how many people maybe you know, that are in business, they may be solopreneurs. They may be entrepreneurs, small business owners. And either they don't have a clue, or they don't pay any attention to the finances. They're like, Hey, I have enough money to pay, make payroll, I have enough money to pay all my bills. I guess I'm good. And they don't dive into the numbers. A couple years ago, someone told me they have a profit and loss statement. I'm like a white, and I found the template and I plug all my numbers in there and it gives me tells me what I'm doing. So you think a lot of people aren't really paying attention to the finances. Like I alluded to earlier.

Aimee LaLiberte
Yeah, I do. And I think that I my my thoughts are for a few reasons. Number one, again, I'm talking about US based businesses in terms of this, but I feel like our education system has failed us in this regard because we don't teach financial literacy and Are schools. So I mean, even I know we're talking about business here, but like from a personal finance perspective, like there's not a, like a curriculum, if you will, that really teaches people how to like how money works like how does compound interest work? How does like how do you read like you have students that are graduating from high school, going to college taking on student debt? What does that promissory note mean? Like those things they don't have. And the same goes to business, my clients and I work with six and seven figure business owners, they go into business because they want to do the service, they want to create the product, they don't want to do their finances, they don't, that's not why they got into business. That's why I got into business. But that's not why they did. However, they're missing the opportunity to really intentionally grow and scale their business without the headache of having to worry, I mean, if we think about 2020, and the amount of stress business owners were under, in terms of all of a sudden feeling like, you know, the business plan was we're going to open we're going to do our sales and all of that. And then like no, like, everything is shut down. You know, finance, like looking at your business financials became a priority, it became a priority, not only because Am I going to survive, but then also, if you wanted to participate in any government programs, you had to provide financial documents. And so if anything, I felt like last year taught a lot of business owners that I may not know how to do my business financials, I may not want to do my business financials, but I need to have an understanding of them. If I'm going to be in the long game. In my business,

Mark Struczewski
I remember, I think it was 2003 or 2004, my wife and I took Dave Ramsey's Financial Peace University. And after I went through the course, I'm like, this should be mandatory before you graduate high school, because I learned so much in that course, I had no clue. And of course, people look at our federal government, the US government, and they're like, well, they're bankrupt, but they're still writing checks. And but how come I can't do that? And you're absolutely right. Um, you know, it's tough and, and numbers are boring, except for people like you. But it's still necessary. I mean, you've got to know what's coming up. And what I do. I still like the old school spreadsheet. So for my business, I have a spreadsheet that goes like for the whole calendar year, every bill that comes out a month, or every bill that comes out once a year. So I can look at that and know any given point in time where I am now I probably could get an app and do this and all this stuff. But this is it. This is comfortable for me. And it works for me. So I can say, Okay, I know, in July, these bills come out in August, these bills come out. But I talked to people and they're like, well, I'm just getting along. And I'm like, well, that's you're getting along now. But at some point, what if your outgo is more than your income. And that's kind of like getting a cup of water when your whole house is on fire? It's the time to take care of it is now. And thankfully we have people like you who can help people like us don't like do the numbers. So if you don't, if you don't know how to do it, or you're intimidated by it, there's lots of people out there like me, that can help you with it. So don't ignore the problem. It's not magically going to take care of itself, if you need some help on that.

Aimee LaLiberte
Yeah, absolutely. And I think like for me, I, I love technology. And I love the modernization. And I feel like now this day and age, because of apps, it has made the accessibility for business owners to understand and learn their financials, it's made it so much more available than it was even, you know, I mean, when I was in college, it was I don't even know if QuickBooks desktop was a thing. And I remember learning accounting like paper based using like a general ledger, debits and credits, right. So and now you have software, you have an Excel spreadsheet, but what it is, is that you have to like make time schedule a date, to have like a money date. However you need to do that. Whether you're going to you know, buy yourself like a coffee or an alcoholic beverage light a candle however you want to do it, but just start having a relationship with money. And it's money is neutral. You can turn around and say, Oh my gosh, I only had X number of dollars in sales this week. And I have a loss for the week I had $1,000 in sales and I had $2,000 in expenses. Those numbers are neutral. It's really what your brain says about them. And I think that's the reason That's so many business owners and people want to avoid their, their their financials, it's because they, they feel like it's saying something about them, it's saying nothing about you, you get to decide what it means.

Mark Struczewski
I'm a big fan of tracking. So I track every penny I spend in my business, and it can be tedious. So when someone pays me, I literally go into my spreadsheet and say, okay, they paid me X amount of dollars. Here's the stripe fee, because I don't want to get to December 31 and go, Oh, my gosh, we're all my stripe fees, I do it as I go. Now, I'm still a really small business point. I'm not making seven, eight figures. So I could do that. But there's also apps out there. I also track every penny, my wife and I spend. And you know what, when you track the expenses, especially when you're married, we don't fight about money anymore, because it's right there on the app. Yep, the summer we spent groceries last month, this month we spent in utilities, whatever the case may be. So the truth will set you free. You may not like the truth, not saying you like it, but the truth will set you free. So I encourage you whether you use a spreadsheet, I mean, I would encourage you to do something electronic because it could do the math for you don't do it a notebook, because then you got to, you know, carry the one and all sort of stuff. There's QuickBooks I saw, I do Duolingo for my Spanish lessons every day, and QuickBooks is on there a lot promoting their QuickBooks function. But you know, you do you if that works for you. But here's the thing, QuickBooks is not free. So if you're a new business, maybe you stick with a spreadsheet, and as you grow, because it's a monthly service, then you can pay for it. I mean, don't go out and get an accountant to charge you $10,000 a month when you have no income mean be smart about it. But don't ignore the problem. I think that's the whole message we've had since we started talking today.

Aimee LaLiberte
Yeah, and what I do want to say is that have a system that works and serves you. So an Excel spreadsheet works for you, I'm not a fan of spreadsheets of using them only because if your intention is to scale, that I love the idea of having a using an accounting software that will grow with you. That being said, that process works for you, you have a relationship, don't change it, if it serves you, like awesome. If you don't want to pay for your accounting software, there's a product called wave, it's free, you can use that. And then again, as you scale, if you want to make an investment in a more robust software, there is QuickBooks, as you mentioned, there's zero, which is another software, that's the one that I recommend, because I feel like the design of it, the software design of it is like in a very minimalistic way. And I feel like it's very inviting to a non accountant person. So, but it's it's more of like, like you said, don't not do anything, don't abdicate responsibility for your finances, because you're missing like a critical part of your business. You can make such great decisions using a very much holistic approach, like, you know, how much money am I spending on this product? Am I do I like the profitability that I have in this product? If not, then maybe do you raise the price? Do you eliminate the product, but those are all decisions that become available to you in a very informed attentional way. If you are sitting down making decisions, and you have the Financial Peace involved with everything else, like maybe your customers love this product, but it's not profitable. So like, how do you like create resolution amongst that, like having that number, and that information will serve you and your clients.

Mark Struczewski
One of the things I practice because I'm still a small guy is I question everything I spend money on. And my fear is, when I start rolling in the dough, I may just like oh, it's only $100 or 20 $200, only $500. And I will lose that sense of going Wait a minute. Is it really worth paying $120? a year for Canva? pro? Yes, it is. Okay. Is it worth paying $120 a year for Dropbox? Yes, it is. But I take the time to think about it. I don't have a lot of expenses. Yeah, I don't have no any staff, no staff that's really getting those mark. I don't have any staff. So but I think when you're a small business, you tend to watch what you're spending. But when the money starts coming in and tell me if I'm if you disagree with me here, we tend to spend things. Maybe it'll be used sometime I'll just pay for it and never use it and I hate wasting food. I hate wasting money. So what are your thoughts on that? 

Aimee LaLiberte
Yeah, so I think that's where I'm a certified profit first professional. And I think if you have profit first implemented in your business, that really helps create constraint into those items. So for instance, it doesn't matter if you're at, you know, just starting out in your business, and you have under 100,000. Or if you're a multi seven figure business, it This applies anywhere, there are percentages that profit first that we recommend for you. And those are the percentages in order to create maximum profitability. Those are the percentages. So and again, we do quarterly adjustments. So every single quarter, it's organically built in for you to review your expenses. And you should be looking at your expenses on a date on a month to month basis, as well as like on from like, a prior year in year. Because let's say, and we all do it. There's a software that you're like, you know what, I'm gonna try this out for 90 days. I'm willing to make that investment. And I'm gonna see if I use the tool, and I like all my reasons for it. And then you evaluate, did I use it? Did I like it? Do I want to keep it and then you can go from there. There's no problem with testing, because that's like, the whole like, iteration. and and, and and experiencing, like, is this gonna work or not? I mean, that's all part of the, the journey, right? That's why you got into entrepreneurship is because you're like, I want to create something, and I'm willing to test it out. And I'm willing to see what works and what doesn't work. And, and so that's where it is. But I I do think so I mean, I work with, I work with businesses that are just starting out all the way up to the multiple, seven figures, and we're looking at the numbers, anywhere you are, it's just a matter of like, do you need to leverage someone like me to the full capacity that someone at a seven figure business, probably not, because you are going to be the person who is going to be able to have the relationship with the numbers. And if something looks off, you should be able to know exactly what that is and be able to course correct. And instead of you know, and then the way that you leverage someone like me, it's in a very high level way, if you want to do future focused forecasting, like that's where like someone like me, like, you schedule something, and like you pick my brain or you read content, or you listen to the podcasts that I record, you know, so it's like that kind of way that you can improve your business financial acumen simply by like having the relationship creating the system, and then, like, moving from there.

Mark Struczewski
I love how you mentioned testing, because the one of the things I use for my podcast is and you'll get this tomorrow is a 62nd video, which is got your picture my picture, the title, the episode and 60 seconds of audio. And I use a company called headliner. Okay, now I pay them 26 bucks a month. Because when I first started using them, I'm like, Am I gonna use them for a whole year? And so I decided to see how long I would use it. Well, now I'm at the point, okay, I paid in 26 bucks for three months. I'm like, you know what, I'm gonna do this for every episode. So now I'm looking at paying for a whole year because you save a little bit of money on that. So it's really important that you test another example, I host my website on kajabi. Now you can pay I'm on the plan is $200 a month. Or if you pay for it a year in advance, you get like two months free. Now when I first started, I'm like, Am I gonna be on this kajabi thing for a while. Now? I know I am. So I pay them yearly. So I want people to hear what you said about testing. If you're not sure. Try them out for a month and see or maybe two months and go well, no, I'm going to try something else. But once you pay it for a year, a lot of times you can't get that money back. Okay, so take it for a test drive. And that way in the case of headliner pay 26 bucks, if it doesn't work out, I've only spent $26 as opposed to what their yearly fee is. So I really want every entrepreneur or anybody listening to this podcast. Absolutely, actually, to really say hey, test something out. Apple Music or Spotify. Try them both out for a month. You're not losing a lot of money instead of investing now that's a poor example because you can't pay for a year in advance. But just try things out. I think it's people are looking at what am I don't like it. Well, you know, if $26 hurts you then you got bigger problems that we can address on the show today.

Aimee LaLiberte
Mm hmm. Yeah, no, absolutely. I love the idea of doing that and because you are testing it out and and it's it's the most beautiful thing because then it's not you sitting in this like, unknown of like what I like to do I want because I think the other part too is decision fatigue. I mean, that's a real thing. And as business owners Just as people, like we have to make decisions, we make a lot of decisions. So if you're constantly oscillating on like, well, this Kajabi thing sounds amazing. I hear a lot of people like it. But Gosh, do you think I should do that? Like, is it worth you knowing? $200? And like stopping the inner dialogue of like, do you don't you like you get to decide that. But then once you decide, move on,

Mark Struczewski
Yeah, exactly. There is a lot of like you said, decision fatigue. And I have found humorously, people are getting fatigued over small things, and not the big things. And I'm like, I think, if any needs to be reversed, you should be sweating the big decisions, and not the small decisions. So I am working actively working on my decision muscle. So I asked my wife, you know, because I'm a gentleman. What do you want to go for lunch? I don't know. Why do you feel like having chicken or burgers, or if she was, I don't know. We're going here. Like, I'm not going to go eat six hours trying to figure out we're going to lunch. I give her the courtesy. Even if when my friends, I'll ask a couple times, if you ain't making decision, bad English. No apologies, I'm making a decision. Because I'm hungry. I'm not going to sit there and go, Well, I don't know, mate. No, I'm going to make the decision and go, if you don't like it, you have the opportunity to make a decision. And I think people need to practice building the decision muscle. And the best way to do that, I think the only way to do that is start making decisions, start making small decisions that make a little bigger, a little bigger, and all of a sudden, that's why people who are CEOs or have a seven-figure company, they make so many great decisions because they've been practicing decisions for so long. If you're paranoid or terrified of making decisions, while start making small decisions. Am I going to have water or Diet Coke, water boom decision done? The more you did that, do that, the better and quicker, you can make decisions.

Aimee LaLiberte
Yeah, absolutely. I think that that's, that's interesting. So we are heading out of town a month from now. And we haven't been away and in a while. And when we were preparing to like the pick, like, I'm the person that was doing all the planning my husband and I and everything. So he's like, well, I don't care. Where do you think? And I'm like, well, you obviously have an opinion. And so what I ended up doing after us being together for over 20 years, it's it's like, Okay, I'm gonna like get it down to three options that I would be completely fine with. And so then you get to decide those three. And I love all my reasons for doing that. And that's how we make it but like, I don't know, those three words can drive me crazy. Like, it's just like, how do you not know? Like, I'm like, I can't I have an opinion about just about everything. What's going on?

Mark Struczewski
Yeah, my theory is when we go on vacation. I'm like, if you're not gonna pick, I'm gonna pick and you can't complain. Because like you did with your husband, I do say where you want to go. If you came up Come idea. We're gonna go around want to go and no complaining. Now my wife. She's a wonderful wife. As long as she's with me, we could be in Disney World, we could be in the Grand Canyon long, she's with me, which makes my life really happy. Because I can go wherever I want to go. And she doesn't care as long as we don't go to like a football game or a basketball game or something like that. So that's really cool. So my life is a little easier, but just build those decisions. So Amy, you gave us a lot to think about today. I and you didn't go really deep in the in the weeds, which I really, really am thankful for. Because it's really easy to get those glazy look on people's face. And I gotta believe everyone listens to the show. We're like, wow, that made a lot of sense. And I don't feel overwhelmed. So you did. Good. So where can you go to find out more about you and what you're doing in the world?

Aimee LaLiberte
Absolutely. So if you visit my website at myvirtualcfo.co. That is my website. And I am actually hosting a masterclass later this month, July 23. So there will be information for you to sign up if you're interested. And we'd love to have you.

Mark Struczewski
Now listener these episodes are recorded released the day after recording. So you're listening to this on July 2. It's actually July 1, we're recording it and she just told you something's coming up on July 23. So I know you used to listen to podcasts while the episodes come out like 10 years after they recorded this is just yesterday. So go sign up for her free masterclass July 23. You could say it was free, right? I didn't make it up.

Aimee LaLiberte
Yes. No, totally free.

Mark Struczewski
is a free Okay, free 23rd it's only July 2, you've got 21 days. Don't wait until July 23. go sign up right now. Okay. Amy, thank you so much for being on the show. absolute delight having you here.

Aimee LaLiberte
Thanks for having me. Mark. Have a great one.

Transcribed by https://otter.ai

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