If you’re like most business owners, you probably didn’t start your business because you love dealing with all the money stuff. Spending it is much more fun than bookkeeping and budgeting, right?

But part of running a successful business involves managing our finances so we actually make a profit and aren’t working for nothing.

That’s why I chatted to my friend and client, Kristen Ricupero, so she can share some of her best tips for staying on top of your business finances.

Kristen is the founder of Financial Fitness Coaching. She’s a financial coach and profit adviser who specialises in helping small business owners and entrepreneurs manage both their business and personal finances.

If you want to simplify your money, strengthen your financial management skills, eliminate debt, manage your cash flow and build wealth, Kristen’s your girl!

Today we’re chatting all about how business and personal finances work together, juggling all the business hats with a good money mindset, the best tips for sorting your business finances, saving on expenses, planning ahead for big investments, setting big lofty goals and a whole lot more!

Hit play below to hear all the juicy bits!

If you prefer to read, you can skip to the word-for-word show notes here.

Get more Kristen goodness below:

Read the word-for-word show notes

A holistic look at finances (0:38)

00:00 Jessica - Hey there. It's Jessica from Jessica Haines Design here. Today I'm joined by the lovely Kristen. Kristen works for Financial Fitness Coaching and she's a finance coach and profit advisor for small business owners and entrepreneurs.

She helps with getting all the business and personal finance stuff sorted, so things like simplifying money, strengthening money management skills, which I'm sure we can all use, paying off debt and creating cash flow systems to help maximize your profit and build wealth, which is bloody fantastic. I'll let Kristen introduce herself and tell us a bit about what she does. Go ahead, Kristen.

00:38 Kristen - All right. Well thanks again, Jessica, for having me. I'm Kristen and as a financial coach, I specialise in helping, as you mentioned, business owners in both their business and their personal finances, so I look at it really as a holistic approach.

Too many coaches, whether they're a business coach, finance coach or a bookkeeper or accountant, focus on one or the other and at the end of the day, we can't just make more and not know what to do with it, and we can't just make more and dump it out the other end, so I want to help both maximize the profit. We usually start in the business and look at:

What are we doing?
Are we capitalising our cash flow?
How are we managing our finances?
What other systems do we have in place or not have in place?
And how can we get on a great schedule for your business so that you're not missing anything and you're staying on top of your money, but it's not consuming your life?

At the end of the day, managing your money well in your business should give you the ultimate freedom to have a better schedule, to know exactly how many clients you need to take or widgets you need to sell if you're selling products, in order to hit your goals and to build your life around your business instead of that business around your life.

01:54 Jessica - I love that. It really is one of those holistic things. It impacts every area of your life if it's going wrong. Working on both parts of it does have that flow and effect. And the more profit you make in your business, the better at the end in your pocket, so always a good thing.

02:13 Kristen - The more you get to take home, the more you have the options and opportunities to do or reinvest into your business for growth opportunities. Profit at the end of the day should be the number one goal because it's what gets you to the bigger picture goal, whether that's impact driven or family driven or something else.

02:32 Jessica - That's true. And it's especially important for us mums as well with the whole we want to have freedom and flexibility around our kids. If we're not making enough money, that does make it a lot harder, so I think it's awesome what you do and the fact that you can give people that freedom, which is bloody amazing. Coming from a corporate background, the freedom is one of my biggest values and being able to be there for the kids and my husband when they need me, so I love it!

Starting a finance business around kids (3:03)

03:03 Kristen - Absolutely, same here. And truthfully, that's why I started the business because it was something that made an impact to me. But at the end of the day, I just knew that there was something more.

I had been a GM for restaurants, so anyone in the service industry, no matter where you live or what you do, just know that it's just hour driven, right? It's never ending. And then I had worked for a small family company as well and they were great, but it was still I had to report somewhere 8 hours a day.

When my son was born, I really got this shock in reality that I'm one of those people that felt bad calling off, right? I never called off in my life, rarely. So I can count on one hand. And when he was born, things just happened. He got sick and like okay, do I have to do this all the time to somebody else? Or like I can't be there or I can't be home with them. So that was a major driving force for me to open my own business.

With financial coaching it was something that made an impact because I have not always been good with money and I think that's so important to share because I'm not coming like I've got a big finance background from college, I have an HR and IM degree. Hotel, Restaurant and Management, that was what I did, which played a role, but at the same point, I struggled with personal finance and I was miserable, I was in debt, I was over my head, I was struggling to make ends meet even though I made good money.

That's where the whole passion started and it started in the personal finance end and it really grew to the business owners as I continued to work with more and more clients along the way.

04:53 Jessica - I love that. I was similar. There was a period where I struggled with the personal finance side of things and even when I started my business, everything to do with numbers felt so overwhelming and I was new to it all, I was trying to figure it all out. When you're a business owner, you're wearing every hat, so you don't necessarily have that time to just solely dedicate a day to figuring it out or a couple of weeks to figuring it out and everything, so I found it very overwhelming when I started.

Juggling all the business hats with good money mindset (5:27)

05:27 Kristen - Well you don't get into business for this. We think that I'm going to create a website, charge XYZ dollars and make that money and it's all done at the end of the day and people just hire me and pay me, and it's the way it works. But anybody who started the business then knows that it just doesn't quite work that way.

We've got to think about taxes. We've got expenses to think about. People don't always pay on time, or you've got to make sure that you have systems in place to make that simple and easy for them. But we don't get into business because we're good with the money, or we want to be a bookkeeper or an accountant. We get in because we're great at what you do and you know that you can make money doing it and have that freedom of time, hopefully.

06:09 Jessica - Exactly. And touching on that, the money mindset plays into it a lot too. If all of that side of things is a big hot mess, you're not going to have the money mindset to follow up on missing invoices or charge higher rates and things like that. But if you're confident in those foundations, then it makes you more confident overall, so you'll likely charge higher amounts, you'll be on top of all those missed invoices or actually getting invoices out in the first place and things like that, which makes a big difference.

06:44 Kristen - Absolutely.

Top tips for sorting your business finances (6:48)

06:48 Jessica - And do you have any tips for getting your business finances sorted in the New Year?

06:57 Kristen - Yes, so I have a ton of them, but we start kind of simple. So if you've been in business for any period of time, let me just say six months, a year, or five, it doesn't matter as long as you're not brand new. The first thing we want to do is go ahead and reflect back on last year. Okay?

Reflecting back on last year, we want to look for trends. Ideally, if you have some software that you can pull up that has your tracking abilities like Zero, Wave, FreshBooks, QuickBooks, anything like that. If you just have Excel, that's great too, but let's have one of those.

We’re looking to see:

What were our highest months in revenue?
What were our lowest?
What were our highest months of profitability?
How did each service (offer or product) rate?

Within that, that tracking is going to come easiest out of like a bookkeeping software, but you might want to see how did your ongoing monthly retainers play up against your VIP days versus a one off or deep dive sessions or depending on what you offer.

And with it, we just want to kind of look back and reflect and see:

Where was the majority of my revenue coming from?
Is there anything that I'm offering that we spend a lot of time on and it's not generating me any revenue or it's not a profitable product or service, and you're just kind of pushing it because you really want it to work, but maybe it's just not working. We've all got those, right? But doing that reflection first and foremost.

My second step would be then that we want to go in and we want to do that budget and forecast for next year. So looking at 2023, you can use a lot of that same stuff so that you can gather your trends. You might traditionally always be slow in May and August and doing that, then you can use those months if those are your slower months based on the trends looking back, maybe that's either a month that you purposely take off and you plan for cash flow wise. Maybe it's a month you run a special or some kind of deal, or you do a big promotion, or you can just kind of manipulate what you're doing based on those trends and making things plan out and fit the best. Right?

09:21 Jessica – I like that. Those could be good times for launching things as well when it's a quiet time, because you're building that excitement with a launch or scheduling holidays even and planning them in.

09:34 Kristen – Yes, and so you can plan out knowing that's going to be planning time, whether you need the additional cash flow. Because when we look at that and we do that planning, the whole point about cash flow and what we're kind of missing is that the months when you need money the most might not be the months that you generate it, and so if you can know that looking ahead instead of getting to May and being like “Oh, my gosh, I can't pay myself, I can't pay my bills, we can't pay our rent, we can't do whatever”, but we know thinking about ahead of time “Okay, I need to be saving in March and April for May expenses in the business and to pay myself at home”. You could be doing a lot different planning leading up to the way.

Saving on expenses and planning ahead (10:11)

10:11 Jessica - Right, that makes a lot of sense. One thing I did probably about a year ago now was created a spreadsheet of basically all the software I use in my business, the memberships and things like that and when they come out, and I realized pretty much August, September are my two most expensive months because that's when pretty much all of the subscriptions for my business that are annual hit. So what you're saying makes total sense, knowing that that's when everything's due, I can save up throughout the year, so it's not hitting the pocket.

10:51 Kristen – Yes. Annual accounts are probably one of my favourite ways to save up for those things, whether it's a membership that you belong to or using a course software that's more expensive, like Thinkific or if you're paying annual for Kajabi, or insurance. There can be huge savings when you pay for things on an annual basis, but if you're not prepared, it's not worth the savings if you have to go into debt for it, or if it stresses you out or any of those types of things. So annual accounts are one of my favourite accounts to implement at the end of the day. I love that you're thinking of that and you use that.

11:25 Jessica – Yes, it was eye opening when I did it and it made me realise just how many things I'm signed up for that I'm not using as well, so I went through and cancelled a lot. I think doing that, spending about 2 hours on that saved me about three grand a year just for basic easy stuff I could get rid of.

11:42 Kristen - Oh my gosh, that's phenomenal. Good for you. I love it.

11:46 Jessica - It's awesome. It makes a difference. And also we're saving up with those accounts. They give you the chance to save up for Black Friday when you get a lot of deals on a lot of business stuff as well. So if I know I need to purchase something, I love saving up for Black Friday deals and just waiting that little bit extra to take advantage of the best ones. It gives more flexibility there.

12:07 Kristen - Absolutely. Oh yeah, I love to do that. So if you think about any big expenses in the business that you have, depending on what your business, then you can name that account whatever you want. But let's say that your photographer. I'm sure you work with a lot of photographers just being on the website end of it maybe and helping set that up. But photographers historically spend a ton on equipment, whether it's lighting or cameras or the computers or the software, there's just so many expenses that you can spend on to upgrade and up level your services.

So having like an equipment account where you save either a percentage every month or a dollar amount, saying “Hey, I want to invest 5000 into software or equipment or a new computer this year”, take that five grand and divide it down by twelve and just save it every single month, then whenever you find that deal, Black Friday or a summer sale or Labor Day or something else, then you can jump on it.

I like to look at kind of any opportunity funds, right? Like just to have a little bit of extra money for the right opportunity for when you need it.

13:19 Jessica - Yeah, that makes sense. I hadn't even thought of sales other times of the year, but it really is an opportunity sometimes if you have that sitting there, you can just go and do it. You don't have to keep waiting when you have the funds, so it’s definitely a good thing.

13:34 Kristen - Yeah, absolutely.

13:37 Jessica - I actually need a new laptop soon, so yeah, that's on my list at the moment to save up for.

13:43 Kristen - Oh man, you can spend a lot on that.

13:47 Jessica - Yes. Luckily my husband is an IT guy, so he can get some pretty good deals through his work most of the time, which adds up and makes a difference for sure. I'm pretty lucky there.

13:59 Kristen - Yeah, you are.

Saving for big investments with Profit First (14:02)

14:02 Jessica - And do you have any other tips around prioritizing and saving for big investments in your business? Things like all your equipment, getting websites done or brand photo shoots and those bigger expenses that we tend to have over time?

14:15 Kristen - Yes. So in any of them, I like to just use the bank accounts, right? Because we traditionally look at our bank accounts to see if we have money to spend, plain and simple, right? Like, I open up my app and I say “I want to buy a new chair for my office” or a couple of books or whatever. I look to see is there money or no money.

So with that, then we want to make sure that one opportunity is to use a separate account. I'm sorry, Normie, I want you to go down with Daddy, okay? I'll be down soon. Go with Daddy, please. Okay. Thank you. Okay. Thank you. Please go down with Daddy. Sorry about that.

14:59 Jessica – It’s okay. We’re mums, it happens! My little one's rolling around on the bed at the moment. Thankfully, she's happy. Feet up in the air.

15:09 Kristen - That's good. But yeah.

So, absolutely, when you look at using an account, what happens is you can get it out of sight, out of mind from your traditional operating account.

So as a certified Profit First professional, one of the things we do is use multiple accounts for multiple reasons. When it comes to big saving investments that you want to make and saving for those things, it doesn't matter what that is, whether we're using an annual account to save up for something we have to pay, like insurance, something we want to buy, like a piece of equipment or a course that you want to invest in, branding, like you said, a photo shoot, like that website.

We all have that intention. We say “Well, I'm going to budget out and I'll save”, but if we don't put it somewhere, we tend to spend it. Right? We just tend to end up forgetting that we were saving for that new website or a landing page or whatever that piece is.

So naming that account, whether you call it a growth account, I have a “personal development account” I call it, so that for me, is where I'm like ”Oh, I want to jump on that course”, I want to take whatever investment that looks like for me. I definitely used it with my website. That's where I came out of being able to work with you (see the projects here). But you don't have to give it like, a name if it's something that you just want to know that you want to invest in yourself, your growth, your development, that can be all sorts of areas of your business.

So the more defined we get, and it all goes back to setting up your year for success, planning that budget, planning those goals about what is on your list for this year, and don't just say something to say it, right? Too many people are like “Oh, well, I want to double my revenue”. Well, is that realistic? Is that right for you? What is that revenue going to do for you if you double it? Will it allow you to do X, Y, and Z?

We want to get a little bit more specific, but knowing what you want to do, that hey, I want to level up my website, I want to level up, and then how do I want to do that? Is it within the branding? Is it within the photos? Is it within what piece are part of that? And then organizing that about what comes first, the chicken or the egg and prioritizing those items.

So putting that thought and that planning into the budget element and the goals element can help you with everything from marketing to growth to development to launching, to scaling, to setting the hours that you want to work in your business and having them ideal times. There's just so many parts that that budget plays a critical role into your entire year of success.

Big lofty goals (18:01)

18:01 Jessica - Definitely. And this is the perfect time to be thinking about the budget coming into the New Year and planning it out and making a goal for the year. One thing I find, you kind of touched on it slightly there, is I have big lofty goals sometimes, and they're not always realistic around my little boy and my baby, so I have to remember I don't want to be working 40-hour weeks and everything. So sometimes they're a bit far-fetched. It's a good way to check in as well.

One other tip I have around that that I've been trying to do is I think about how many of each service I have to sell to hit that goal. If I set a goal of $100,000, how many websites do I need to sell for that, or how many VIP design days and things like that, so that helps me keep in check.

18:53 Kristen - Absolutely. I love to reverse engineer. We call that a RIFA, a required income for allocation, so whether you're talking about how much do I want to bring home to hit personal goals or how much do I need for expenses, or how much do I need to invest in something, figuring out what that top number is and dividing it there by your average product sale or service sale is awesome because that also gives you the peace of mind.

I'm sure you've already experienced this, that like “Oh, well, I need to sell ten a year and I sold one this month, so great”, I can mentally move on to next month. Right? And so it gives you just another way to kind of check in with yourself and say, okay, well, I can ease up and relax, and I love that you're so realistic about what your goals are as a business owner and as a mom, because that's important.

19:49 Jessica - It is. And your time is more limited when you have kids sometimes and you don't want to be working all the time, you want to get to have those fun moments and hang out with the kids. And we all know kids are germs and they're going to come home and make everyone sick at least a couple of times in the year and stuff, so being realistic around that makes a difference.

20:12 Kristen - For sure. And I have very similar goals to the point where one of my goals a couple of years ago, I even included in business goals, was to take the kids out for each of their personal days. So I wanted to make sure that I had enough fluidity in the business to have a special day with my son every quarter and a special day with my daughter every quarter that was a school day that we played hooky.

20:34 Jessica - I love that.

20:35 Kristen - Yeah. But that had to fit into business goals for me because it needed to be a day that I could afford to take off, that I knew didn't have to book extra clients or do those things. So thinking about those personal goals too, with the business is really important.

20:53 Jessica - My little one starts school in Feb, so I love that idea and I was actually saying to my husband a month or two ago that I'd love to do something like that, where we both take a day every so often with him, so thank you for sharing.

21:07 Kristen - Yeah, absolutely. My six-year-old, we can't quite do the same with traditional school as I could daycare, but he asks all the time when we're going to have another mommy and Vinny day.

21:21 Jessica - I love it. So cute. And it's special memories for them too, that's going to set them up for the future, to see the magic and build that connection between you and him as well.

21:36 Kristen - Absolutely.

21:38 Jessica - Well, this has been really great to chat to you about this. I love talking about this sort of stuff, even though I'm not always great at it. Thank you.

21:46 Kristen - No, this was a lot of fun. Thank you. I love just getting to geek out over it and to share how we can make money a little more fun, a little simpler, break it down a little bit, so thank you. I appreciate the opportunity to get to help here.

Where to find Kristen (22:00)

22:00 Jessica - Thank you. And where can people actually find you online? And in addition to that, I know you have an awesome freebie that people can sign up for if they are interested in hearing more from you.

22:12 Kristen - Yes. So website is financialfitnesscoaching.com and that freebie happens to be right on my homepage, and then if you go to the resource page, you will find a whole host of different business and personal finance resources that you can join.

Then on Instagram, it’s Financial.Fitness.Coaching, and that is where I am most active. I love to share in my stories, love to share even just like personal tips on how we're doing money with the kids and helping them manage money, different tax saving tips so that I'm not an accountant, what to ask your accountant, how to talk to them, what to look for, because you can involve your kids with that too and try to again bring it as that holistic approach and share what we do as well.

23:00 Jessica - I love that. And having created your resources page, there is so much epic stuff on there. When you sent all the information through, I was just so impressed and I went down the biggest rabbit hole looking at everything.

23:15 Kristen - That was my goal.

23:16 Jessica - Yes. Everyone go check it out!

23:19 Kristen - Yeah, I want you to find like a one stop shop for just finding a wealth of information that you can use and implement.

23:26 Jessica - Yes, definitely. And there is a lot of actionable stuff in there, which is awesome. And your blog as well, that has a lot on there too. Make sure you check Kristen out, everyone.

Well, thank you for joining me today, Kristen. It's been absolutely amazing to chat to you.

23:45 Kristen - You're you too. Thank you so much. I really appreciate it. Look forward to seeing you again.

23:51 Jessica - Sounds great. Thanks.

23:52 Kristen - Bye.