Skype Call: Cash Flow with Jerry Weiner of PWD

 

Photography Brand Makeover

 

Lesson Info

Skype Call: Cash Flow with Jerry Weiner of PWD

So now we have a special guests because when you build a business we talked a little bit about this because we're going to talk about pricing and how to price this afternoon, we're talking about costs one of the things we see happening and it happened to me when I was first starting and I talked about paying yourself so you know that you're there there's money coming in and out, but you're not getting any of it. I know there are people at home that that are are saying that is me right now I'm busy and charging people they're paying me so things must be good and then the lab bill comes in the frame or bill and then you know, the government comes in and they want their share and you look and you just don't have that money they're so we have a special guests who is joining us via skype his name is jerry whiner and he owns a company called p w d labs and he's located in atlanta, and I was telling you guys a little earlier kind of were visiting he is a boutique editing outsource company has...

a lab also little a smaller little niche lab, but what we were introduced him for was his editing services and cost of sales and cash flow in all of these things kind of go together because part of understanding your numbers is understanding where the money's coming in? Is it money that's coming in to pay for products and services or is it rent money and overhead money and employees money that you're just paying whether or not you have any clients so let's welcome our good friend jerry jerry stays in joining us good welcome to the david letterman and oprah show I don't know which one of you know I don't know it looks like both of them clearly it's been fun watching you guys? You're doing a great job. Oh good harry, I think we kind of like this a lot I don't know this is it seemed very natural and I think they've created monsters and this is way more fun than all the work sitting back on our guests. Well, thank you for joining us. We just want to have a little conversation. I know it's fun for people hear voices other than ours. And when we first met jerry just to give everybody a little background, it was actually in one of our first meetings was in a hotel outside the coffee area and we had just finished having a conversation about things that we thought they should be doing different and then he got his coffee and came over and said they should have the line this way, you know, and we're both like, we love you when you innocently that he was our kind of business thinking person and then come to find out he has this extensive business background having built successful businesses and he's very smart on the financial side which is what's so scary to so many creatives because we want to do the pretty part not the hard part so welcome and thanks for joining us so what we want you to help us share with everybody are some nuggets about cash flow we we bring in money and then we have the money to pay our bills which is a really good feeling and when you're sometimes you're seeing big amounts of money I mean it's not uncommon for a new our business to see five ten, twenty thousand dollars running through your business in a month so where is that money? Why is there not money left for us? Right? Well you know cash flow is the lifeline of any business without cash for whatever else we dues isn't going to be very successful photographers tend to like to think of themselves as artists and photographers and the light which they are but just about every photographer I know is also in business for themselves and anybody who was in business for themselves has to or should spend as much time on understanding business issues especially around numbers as they do on understanding how to use light effectively and how to use their camera equipment effectively so how do you how do you share with people about cash flow because you have it coming in and you have it going out? How are people supposed to get their arms around knowing where is the money for me? Right it's like anything else you do? You have to have a good approach to doing this, so we recommend that you do a cash flow analysis forecast if you will on a regular basis. One of the questions obviously that comes up is geez, I don't know everything it's gonna happen in the future, and the answer is of course you don't because not everything is exactly defined today, but the key then is to be able to guess to make those things you know, even if but you do know they're gonna happen. This is one of those cases where a decent guesstimate is better than no number at all as you work through time, then you could begin toe fill in those missing those missing pieces if you want, but each month you should be able to identify the beginning cash balance you have how much cash you're going to bring in that month and how much cash you're going to spend that so you can figure out what your balance will be at the end of the month. Once you do that, you could begin to see month in and month out into the future whether or not you can a pay your bills by a new piece of equipment or exactly how much resource you got to be able to do some of the things you want to do, and I think this is really important for an industry that's seasonal a lot a lot of times we are flat all year. I mean, we have peaks and valleys, and it depends on where we live. What a lot of it is our climate where I live in july, wedding photographers have got to be starving because it's so mcgee and gross, I can't imagine getting married in july, so you've got a plan for that. You've got a play on cash flow to pay your bills so that my gosh, you have money to live on in those slow month. So it's, so important that absolutely, in fact, the photography is both the seasonal and a cyclical business. Not only do you have seasonal issues, but for example, you think about a an event photographer it's a fifty percent the pause it a year before the event gets the rest of their money about thirty days before the event, and then when it comes time to pay all the expenses related to it, you need to make sure that that money you've collected a year ago is still in your pocket. I think the industry came face to face with this, especially in december of two thousand eight and early two thousand nine when the economy took a very negative downturn and a lot of photographers who had been living on their deposits if you will didn't get that next deposit and it became painfully clear that they had already spent the money they needed to use to pay for the things that they had committed to deliver to their clients. And when they did that they realized that was gone already because they get used to for other things. And now all of a sudden, with no new deposits coming in life was a little bit tougher. So to be able to plan out your cash flow no when the cash is coming in and as importantly no, when you have to pay those bills into the future will help you come overcome some of that seasonal and cyclical fluctuations that this industry is so susceptible to. So, jerry, you mentioned the cash flow analysis and I know again those air sometimes words that are like, okay, what's that it's true it's if so, and you went through it, but I just want to come back and hit on this again so you start with basically opening up your bank statement or, you know, calling your bank or logging into your online bank checking account and writing down the number on the first day of the month of how much money is in your account it's that easy right right exactly in fact I would even recommend erin that you go back a month and use actual data you take the balance of the beginning of the product vermont and just make sure you work your way through what actually happened in your checking account so you can see the dynamics then you bring that about wants to where it is today and then you can start doing a good job of forecasting what's going to happen into the future and you would forecast those separately as I am so revenue as well as items of expense and each month you draw that sub total and then carry that balance forward into the following month just to jump in again why accounting financial management software is so important you couldn't go do this by hand but if you have a tool to use t get this information for you you literally run a report and you have that information at your disposal and if I could just say when I first started my business I was doing that all myself I was entering in every check I was entering every expense and it was good because I learned what is the cost of sale what is a marketing expense what is ah an employee expense I had to figure out how everything went and now I have a bookkeeper who does that so I can outsource it. She logs into my bank account, she looks at the bottom of the check to see what it is she knows where to put it, and by the second of the month, we have financial data to know did we hit our month? Because back to cash flow, we've projected that this month we're going to bring in twenty grand and worse, putting out eighteen grand. We should have two grand left. Well, if we miss a client or two and we only have sixteen grand now we're down to grand, so bench, yeah, you make a really good point here again. Photographers are also small business people, so they have to retain the responsibility to understand their numbers. Now, that doesn't mean that you have to be the one doing all the number entry. As you said, you kind of grew from doing it yourself to having someone do it for you, but I would bet you that you also tend to look at the numbers even though you're not entering them so that you understand they are I'm a little addicted, absolutely a lot of photographers go those air numbers, I don't like to deal with them, you know? We can joke put in f in front of it, you'll do just fine but the but at the end of the day there is no excuse for any small business person not to have in their mind at that moment in time what their cash flow looks like today and where it's going in the future these should be numbers that you are so familiar with them that you wake up in the middle of night screaming if things aren't good it's really I don't need the left yeah, I can totally see that we've we've probably kind of done that and as as your business grows, it gets scarier you haven't employees you have you know, last christmas you did seventy thousand dollars in november that's scary not to have a plan for this november or next november and now I have two companies and it's really scary of six, seven employees and I have to know where we're making money and where we're spending money and aaron is aware too and andrea on the studio side because we have to be if we're down something's got to get cut somebody's actors yeah, absolutely and again, this is the lifeline of the business without cash flow it's totally limiting as to what you could do. A lot of people will say, well, I'll just go put it on my credit card a cz long as you're paying your credit card off once a month and use it is convenience tool that's great but these air not businesses that require long term financing even at seven or eight thousand dollars for camera body you're not talking about a highly capital intensive business so again, this is the kind of business where you need to be able to know what your cash flow is you need to know it intuitively you ought to be able to have a conversation like your cash flow at any point in time whether you have your numbers in front of you or not elektronik spreadsheets all sorts of off the shelf accounting programs are available out there there really is no excuse for not having the tools and learning the tools that are available to you because that will make the mechanical part of it so much easier for but in addition, no matter how you get the work done, you got to get it done. And the important part is that you understand what the numbers are telling you about where your business is going. So I know you have a report, jerry, that can help people walk through how to do this. I think it's on your web site right that because, you know, we don't have time today to go through step by step, but really it's not that big of a deal if it truly isn't and I know we're throwing around a lot of big words and but it's it's step by step to get your arms around. This is sort of like when you learn how to do something for the first time. Like, curl your hair a certain way or, you know, whatever like it's easier every time you could jump back in. I know matt's going yeah told daniel from my hair you feel in the curling iron skills, but but it's like something that you do once and then you, it becomes habit and you just do it every single month. So there is a report on your web site where they can go and learn how to do this right it's in fact, a cz you know, for the, uh, one of your best quarterly and sweet did a freemium, a pdf document that includes some spreadsheet guidance on the title of it is when can I? Can I afford that new camera? Because we know everybody periodically needs to buy some new equipment, and if you go to our website and then to our block it's pwd lamps dot com click our blob search for this article on cash flow. We have a couple of other articles out there that provide links to, uh, cheats on online, but you can download amuse preforming added, they've got some sections from that, they're really ready to go almost turnkey and that we've also gets a good explanation in their standing six tools, so that don't let this scare you on a big level. What he's saying is you need to know next month how much money you're bringing in and what you want to buy, and we just talked in a business plan. I'm going to do four sessions at a thousand dollars average, and I'm going to bring in four thousand dollars now tomorrow we'll figure out how to go get those for clients in the morning, and then this sales plan how to sell them all a thousand dollars worth us, but you need to know that number, what am I bringing in and what I want to buy and then get that bottom number? And if it's a negative that's that's where you know better to know it now, then three months down the road as your running up credit card fees and you're borrowing from everyone you know, like jerry said, I love, he said. This isn't a high capital intensive business. You should be able to bootstrap this business based on the cash flow that comes in, so thank you, jerry, you look for t he looks forward to seeing us somewhere, but we look forward to ceo jerry's at trade shows if any of you guys need him as a resource. A lot of people outsource editing to them where he does that he works as your employees but it's an outsource cost which hits your books as cost of sales, which is a perfect segway into what we're talking about next cost of sales, okay, and all costs aren't created equal let's just say that so all expenses that you have in your business are not the same types of experiences. Some of them are good, some of them are better than others. If you're making money, they can all be good if this number is higher than this number, we're good. We're good. I say I had a conservative cepa and I come from a conservative viewpoint and I I feel that way is dave ramsey to he you know, if you have the money and you can send it question, but I just we had a couple of questions for jerry before we lost him, but okay, as happens with skype, so I wanted to encourage people, perhaps to go to p w d labs, facebook page, ok, gland. They actually just posted a picture of him in his office talking with us behind the scenes, but you can ask your questions to gerri, they're great, great, great great resource and I love there so many people in our industry that will take the time to walk you through this, and I know he did use some bigger words, like analysis and things don't be scared by that. We're business people. So we tend to use words that are the what things were called. But I know that something erin and I try to do. We tried to do in our book, where we take those big, scary words, and we were really simplify them and the spreadsheet jerry had the worksheets and things on his site are awesome. So so, thanks again, jerry, we know you're out there, that was fabulous, and he is definitely our kind of business person.

Class Description

Learn branding from Sarah Petty and Erin Verbeck! Attract the right clients to your business by creating your own unique brand, new distinguishing products, a more profitable price menu, the right marketing and a new sales process!

If your marketing isn't working and you're not attracting enough of the right clients, Sarah and Erin will go step-by-step, showing you how to address each part of your business's brand to make sure it reflects you and brings in clients you'll love.

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