Cashflow Management with Tracey Bissett | E032

Managing the lifeblood of your business.

In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, interviews Tracey Bissett,Chief Financial FItness Trainer at Bissett Financial Fitness. Tracey Bissett is a cash-flow and financial management coach who helps people better understand, analyze, and manage their cash flows, and in particular business owners. 

Episode Highlights: 

● 01:07 – Tracey Bissett describes the kind of work he does. 

● 02:00 – What are some of the more conventional challenges for business owners starting out in terms of cash-flow? 

● 04:07 – What tools and learning lessons can business owners use to educate themselves on how to do better with cash-flow? 

● 10:38 – Are there any books or resources that Tracey recommends? 

● 13:30 – What does she think about the model in the book Profit First? 

● 15:31 – She discusses payment cycles and collection cycles. 

● 22:40 – Business bank accounts aren’t personal bank accounts. 

● 24:10 – How does Tracey Bissett work in collaboration with financial advisors? 

● 26:51 – What are the key things to do to stay on top of the cash-flow of your business? 

● 36:08 – We 

● 37:42 – What are the odds of experiencing a critical illness event? 

3 Key Points 

1. Common situations with entrepreneurs with cash-flow challenges include: not paying attention to where their money is going, not thinking about the way money comes in and out. 

2. Talk to other business owners about their pain points and challenges and be careful when borrowing money from family and friends because it could fail and it could be hard to predict when you can pay it back. 

3. Check your mindset and overcome scarcity feelings and figure out what you can concretely do. 

Tweetable Quotes: 

● “I used to be a banker for many years in commercial lending and risk management and helping entrepreneurs get access to financing and making 

those lending decisions. When I started my own business, I took all the pieces that I like to do.” – Tracey Bissett 

● “Money comes in. Money goes out, and the timing that it happens is that cash-flow cycle.” – Tracey Bissett 

● “Unfortunately, as I have seen many times in my career, you can actually book a lot of sales. But if you only get paid after you make the sale, you can go out of business in as quick as 90 days.” – Tracey Bissett 

Resources Mentioned: 

● Facebook – Jason Pereira’s Facebook 

● LinkedIn – Jason Pereira’s LinkedIn 

● FintechImpact.co – Website for Fintech Impact 

● jasonpereira.ca – Website 

● Linkedin – Tracey Bissett’s Linkedin 

● bissettfinancialfitness.com – Website for Bissett Financial Fitness 

● Profit First – Book; Profit First by Mike Michalowicz 

Transcript:

Producer: Welcome to the Financial Planning for Canadian Business Owners podcast. You will hear about industry insights with award-winning financial planner and entrepreneur, Jason Pereira. Through the interviews with different experts with their stories and advice, you will learn how you can navigate the challenges of being entrepreneur, plan for success, and make the most of your business and life. And now, your host, Jason Pereira. 

Jason Pereira: Welcome to Financial Planning for Canadian Business Owners. I'm your host, 

Jason Pereira. Today's show, I have Tracey Bissett, Chief Financial Fitness Trainer at Bissett Financial Fitness. Tracy is a cash flow and Financial Management Coach, who helps people better understand, analyze and manage their cash flows, and in particular, works with business owners. I brought her on the show today to talk about business owners and cash flow planning. With that, here's my interview with Tracey. 

Jason Pereira: Hello, Tracey. 

Tracey Bissett: Hi, Jason. How are you? 

Jason Pereira: Good. Thanks for taking the time today. 

Tracey Bissett: It's my pleasure. I'm happy to be here. 

Jason Pereira: Tracey, tell us about what it is you do. 

Tracey Bissett: Absolutely. I used to be a banker for many years in commercial lending and risk management, so helping entrepreneurs get access to financing and making those lending decisions. When I started my own business, I took all of the pieces that I liked to do. I love working directly with entrepreneurs to help make sense out of their financial situation predominantly to help them understand what the cash flow cycle is in their business, and help them be able to use cash flow and money as a tool to grow their business, and hit all the goals that they want to hit. 

Jason Pereira: As discussed, you basically help people better manage their cash flow. Talk to me about what some of the more conventional challenges are for business owners starting out in terms of cash flow. I want to look at this over different stages and phases. Starting out, cash is the lifeblood of a business. When I started mine, I watched every last penny then on a daily basis. Tell me about what you see happen out there, and how you fix it. 

Tracey Bissett: Absolutely. The first thing I see is there's really a big hesitancy to even look at the numbers. Not every business owner is doing what you just mentioned, watching every dollar, every nickel and seeing where it's going. First off, I'm seeing people kind of avoid it or not get their heads in around the money piece. Then when they do, they're not necessarily thinking about there will be a natural rhythm and a cycle to how the cash flow comes in and out of your business. The way I like to explain it the most simply is, money comes in, money goes out, and the timing that it happens is that cash flow cycle. 

Tracey Bissett: Unfortunately, I saw many in my career, you can actually book a lot of a sales, but if you only get paid after you make the sale, you can go out of business in as quick as 90 days, just like you mentioned, around cash flow being the lifeblood of any business. So first and foremost, people not aware of it, and then secondly, not really paying attention. If somebody is starting up, I highly recommend creating a business plan that, number one, validates your idea in the market and you know how much somebody will pay for what you want to offer, and that you actually do those financial projections. 

Tracey Bissett: I don't suggest people have to do it on their own. They can certainly work with an accountant, a financial coach, even a financial planner to help them figure that out so that they know going in what will be potentially the amount of time that I'm going to have to run this business before I'm actually getting money coming back in, and I can guarantee that it's going to take longer and cost way more than you ever think it will be when you start your business. 

Tracey Bissett: From a startup perspective, do that business plan and get somebody to help you if it's not your forte, which for most business owners it's not. 

Jason Pereira: It's not. One of the cold first lessons you learn is about cash conversion cycles. It's, "Yeah, I got a sale," but you had expenses that basically had to be taken on prior to the delivery of said product or service. You don't get paid until the end of said cycle. Then of course, no one pays the second you send the invoice. They always take advantage of whatever payment terms they're given, if they're smart, which is a trick that you then learn. 

Jason Pereira: Basically, when we have people who starting out, and you talked about doing the business plan, what other tools or useful learning lessons can they do to educate themselves on how to better manage cash flow when they're stating out? 

Tracey Bissett: I think talking to other business owners who've been around for a little bit of time in the same industry, who are doing the exact same thing, talk to them about their pain points, what are their biggest challenges. You don't need to make all the mistakes yourself and learn the hard way. So, do that. As I said, if you do that financial forecast and just kind of thumbnail how much you're going to need, maybe double or triple that number. 

Tracey Bissett: The other advice I often give is that you want to be very careful if you're borrowing money from friends and family, because you are starting up a business from scratch, and you may not be able to number one, make a success, which is a likelihood, and depending on your management skill and the due diligence you've done, what that probability is really depends. But you also may not be able to guarantee the timing because if your business takes off, and you're going to keep re-investing in the growth, you won't necessarily be able to pull that money and give it back to friends and family. 

Tracey Bissett: So, important to think about. 

Jason Pereira: It's interesting. It does create a different version of schematic game, when you have to answer to everybody in your life. Just an interesting point there, it reminded me of a story of someone who came to me early on when they wanted to start a business. Of course, everyone when they want to start a business, it's only upside. Anyone listening to this podcast is looking to start a business, all they see is all the money they're going to make. That's all they see, right? 

Jason Pereira: Anyone who has an existing business is basically saying, "Oh yeah? You want the cold, hard reality? It ain't like that." The simple fact was I had this one individual who was sent to me. They had come to me, and I'm not going to say what it was, but they were selling this [inaudible 00:05:31] thing. Then I said... I've learned never to judge. I've seen the craziest things in this world make money. I said, "Okay, great. So, what does it cost you to manufacture that?" "I don't know." 

Jason Pereira: "Okay, so but you know what you can sell it for?" They're like, "Yeah, I did some tests and they said I could probably sell it for whatever." I'm like, "Okay, so you don't know what you're going to sell it for. Have you talked to people in the distribution chain of how you can get the ingredients at wholesale prices?" They're like, "Who are these people?" Like, they had done no research. It's like, "Okay, how many units would you have to sell to even break even and feed yourself, because you're talking about quitting your job." 

Jason Pereira: "I don't know." They're like, "I just came to you because I wanted to understand if I should use my own money, or if I should borrow money to start this?" I said, "You've jumped way to the last step. You don't even understand what this looks like right now." I said, "Do yourself a favor-" and I will say this to many people, "Watch every episode of Shark Tank and Dragon's Den you can find, because-" I like to refer to the offers, most case the test to see just how delusional these people can be. 

Jason Pereira: Everybody thinks that their baby's going to be beautiful and it's going to work out, but we know in reality the failure rate on business is quite high. So, the cold, hard reality of business smacks you in the face, and cash flow is kind of the thing that does that, because it's the lifeblood that you're going to run out of sooner than later. That's the start, starting out. 

Jason Pereira: Let's just say they get going, and they're running their business. More often than not, when you're running your business early on, you're too busy doing the "stuff" to basically handle the money in the most efficient way possible, because let's face it, if you get into any sort of field, you do it because you're good at that thing. You're not doing it because you're a good controller of money. 

Jason Pereira: Talk to me about the challenges that you see people encounter in those situations, and then how you remedy that. 

Tracey Bissett: Absolutely, and that's really my sweet spot. I work with majority entrepreneurs whose sales are in the six figure/low seven figure range, so they've been doing it a little bit, and they're hitting the sales, which is great. As you said, they're super passionate about what they do, but they probably haven't had any training around money. 

Tracey Bissett: A couple of things, I highly recommend that you bring in professionals to assist you on the bookkeeping side, and that you work with an accountant. By no means do I think you should delegate all responsibility and authority for the financial piece to them, but you should get the support that you need. Secondly, I highly recommend that you have a regular time where you make monitoring the financial position and the money a weekly thing. 

Tracey Bissett: You may have meetings with yourself. Maybe the first one is just to check out what's going on in your bank accounts. Maybe the next meeting you're looking at your financial results. Which brings me to the third part, you do need to have monthly financial statements so that you can monitor the progress. As I said, you don't need to be the one doing the bookkeeping to create them, but you do absolutely need to know what's going on in the business so that you can see if you're going to be on track to hit your goals, if you need to revise some plans. 

Tracey Bissett: Certainly, by doing a forecast on the cash flow side, you're able to know in advance if you're going to have any issues. I don't think you need to do it in a really fancy way. If you're more comfortable, do it on paper. If not, Excel works really easy. Even knowing one, two, three months ahead of time that you're going to have a cash flow crunch allows you to think of way more solutions to solve the problem, and all kinds of ways that you can figure out how to plug that gap: Can you sell more? Can you collect faster? 

Tracey Bissett: What can you do? Can you go and get a loan at a bank or maybe from an investor? It gives you lots of options. So, being prepared and having a regular routine and a system is really key. 

Jason Pereira: [inaudible 00:08:55] big points there, and I'm just going to kind of dissect a bunch of them as I remember them. One is, the team of accounting and bookkeeper. Too often, a lot of times bookkeeping gets done before the taxes get done, which makes bookkeeping not strategic anymore. Our books are completed. I would say if you're not dealing with someone who's updating your books at least on a monthly basis, you can't pulse check your business. 

Jason Pereira: One of the first things that advisors come to me saying, "I want to professionalize my practice. What should I do?" My first question is, "Well, let's just do a quick Litmus test. How often do you look at your financials?" And more often, the answer is, [crosstalk 00:09:24] hands them to me. They look at themselves and they realize, "Oh, boy." I'm like, "Yeah, do you think Tim Cook looks at it once a year? No, you have to look at this as frequently as possible, at least monthly." 

Jason Pereira: That's the first piece. The second piece is that the annual statements can really mask a lot of variability within the year. Like, "Oh, I made this much money, but then why I was broke at this point of time and having to borrow money?" It's because there's cyclicality to everything. There's different software licenses are renew at certain points. 

Jason Pereira: I think what you said there about being able to plan it out is incredibly valuable. The simple advice people come to me and say, "What technology should I use for this?" For the first time, don't worry about technology. Take your financial statement, look at every line item, take your books, look at every line item, take Excel and where do they fit on a monthly basis? 

Jason Pereira: It's kind of crazy to think that if you're not working with those, essentially it's the old Yogi Berra saying, "If you don't plan where you're going to go, you're going to end up somewhere else." You're running a business and hoping for the best versus being able to strategic decisions. Are there any kinds of books or tools that you recommend for people who are looking to wrap their heads around this? There's your coaching of course- for people who can't benefit from that or for people who have just the need for some sort of firm structure- any kind of mental accounting tricks or anything like that that you use with them? 

Tracey Bissett: That comes back actually to your mindset, interestingly enough. Your views form when you're very young in age: five, six, seven years old. So, however you were raised and whatever was going on in your household, that's going to stick with you. Observe what's going on. Every time you get a bill, do you get a pit in your stomach? Do you start to feel ill? Or, are you excited because that means are moving along in your business? 

Tracey Bissett: Check your mindset. If you have feelings that there's not enough, "I'm never going to be able to make enough money," scarcity feelings, you want to check that and then start thinking about what can you do to overcome that. If you are feeling that way, that's okay. Most of the population is. But you want to move to what can you concretely do? I'm a financial coach who believes in yes, we need to be positive and we need to take small imperfect actions, but we actually have to do something. We can't just do some mindset work and not do any of the practical realities. 

Tracey Bissett: Just like you said with Excel, get into the numbers. I find that most of the anxiety and the stress comes when you don't actually know what the problem is, or you can't quantity the problem. You just know you have a problem, "I don't have any money." For a lot of business owners that I see, there's this constant transferring between personal and business accounts, which I'm sure you see too Jason. Now, you don't know is the issue your lifestyle is too expensive? Or, is the business not making money? 

Tracey Bissett: I can tell you from my experience, the clients that I start working with, 80-85% of them are not pricing appropriately, which ties back to the story you shared. Then they're not getting a consistent paycheck, and it's not really fine and not really the reason they went into business. 

Jason Pereira: A number of things to unpack there again. I always joke that going into business is the most bipolar thing you could ever opt to do to yourself, because it's going to make you go through a lot of highs and lows. The pricing thing is uniquely interesting. It's very profound in my industry when we deal with the only planner specifically. There's a well-known study out of XY Planning Network in the states that basically said that 100% of all of their members ended up increasing their price in the first year. 

Jason Pereira: I kept that. When you start off, you don't know. Maybe you're the new guy, and you just need the sales or whatever it is. The other thing you mentioned about the moving back and forth between business and personal, I see this all this time where they bury so many personal expenses in the business and they basically use whatever credit card that has a better [crosstalk 00:12:52]. Whatever it is. It becomes borderline impossible to get a true pulse check for the business. 

Jason Pereira: One of the best practices I always say is, "Look, whether you're incorporated or you're still a proprietorship, separate account, separate card. End of story. Business only." If you're going to pay for lunches or travel, whatever. Fine. But you better recording that in some way, shape or form, or at least mentally to know that, "Okay, yeah the business made nothing, but I also paid myself a decent salary. And oh yeah, there was all this other stuff that I wrote off." 

Jason Pereira: And it ends up not being that bad. Question for you, have you ever come across the book, Profit First? If so, what do you think of that model? Let's actually talk about that model. 

Tracey Bissett: Yeah, I read the book. I think it's a great model. I think that you have to be profitable in the first place to be able to implement it though. A lot of people, when they come to talk to me about working together, they say, "I want to implement this." I say, "Okay, let's start with your financial statements. Let's see what's going on when you're not making any money." When cash flow is extremely tight, you can't start pulling it off your profit first because you actually can't pay anybody, you can't get anything done. 

Tracey Bissett: That would be my criticism of it, because everybody thinks it's universal and it can work for everybody. 

Jason Pereira: You're absolutely right. For those of you who've never read the book, it's a pretty decent book. It's a mental accounting trick in terms of running your money. We put all the money into one business account normally, but their argument is, no what you should you do is you should have an account for what your target profit is, pull that out every month. You have an account for what your taxes are going to be. Pull that out every month and put it into that account. 

Jason Pereira: You have an account for your payroll. Make sure that that is always topped up. Then you have the operations account. What they're basically saying is that you then operate the business off of that operations account. Well, that works fine for if you are actually making the kind of money you should be, but to simply say, "Oh yeah, I want to make this much profit," and then try to reverse engineer that, it might not work. 

Tracey Bissett: Absolutely. Just what you mentioned about the taxes alone, keeping those separate, a lot of business owners I see, they don't realize they're just holding those in trust for the government. 

Jason Pereira: I know. 

Tracey Bissett: It's not their money, but the majority of cash flow is tight, you need to spend that money. Then they're scrambling at tax time to make those payroll remittances- 

Jason Pereira: HST in particular. 

Tracey Bissett: The sales tax. Yeah. 

Jason Pereira: Because they are ruthless on collection of that. They will seize your bank accounts. You are not getting away with holding on to that money for long. One of the things you mentioned briefly that I want to make sure we hit upon, was basically payment cycles and collection cycles. This is something that can lead people in hot water, constrain their cash flow artificially, just from their own personal habits that maybe want to deal with everything right away. 

Jason Pereira: Can you speak to what that means, what these cycles are, and how you can make them work on your behalf to increase cash flow? 

Tracey Bissett: Absolutely. Depending on what business you're in, you're going to get paid a certain way, and the money's going to come in. If you think about an event planner, they're getting a deposit up front. They get paid the day of the event. Pretty easy to manage cash flow. If you're in a business where you're manufacturing something and people pay you after the fact, you're putting in all of that money to get the product out there, and then people are going to pay you later. 

Tracey Bissett: You're going to have those timing differences with those inflows. You're going to have those regular outflows if you've got that manufacturing business. You're going to have to pay your employees. You're going to have to pay all your utilities, all of the inputs. So, you're going to have that difference there. When you put all the pieces together, you're going to see what is that shortfall. Depending on how tight your cash flow is, is how granular your actual forecast should be. 

Tracey Bissett: The norm is to do it on a monthly basis, but for some people that's not going to be sufficient. You might need to see it weekly or daily to be able to truly understand which day you've got money and which day bills are due. So, understanding that cycle where the gaps are, then brainstorming ways to deal with it. If you've got a lot of slow payers, can you start making collection calls? A lot of times when people get into business and they are going to allow people to pay them later, they don't actually set up a collections process. 

Tracey Bissett: It's just, "We send the invoice. We hope somebody's going to pay us." 

Jason Pereira: For the record, on my other podcast Fintech Impact, there was a recent podcast that just aired on the first of September, which happens to be the day we're recording this... Actually, the day before, for a company called Biller Genie, which is a tool for collections processes. In particular, even micropayment [inaudible 00:17:02]. They had given examples of average invoice is $20.00, and they had to do collections and manage all that. If you're letting people pay later, and the smaller your transaction amount, the more heavy lifting this is going to involve. 

Jason Pereira: So yeah, it can be painful. The other thing in just one of the behaviors I see people get into that artificially constrains their capital, is there's lots of people with the mentality, "If the bill comes in, I'm just going to pay it right away. Otherwise, I'm going to forget." What does that do to them, unfortunately? 

Tracey Bissett: It could change your cash flow. If you're thinking about it purely logically, you should not pay people until you have to. Even if you're thinking personally, think about when you're paying your property taxes to the city. A lot of people go on those 12 month plans to help smooth out the cash flow burden, but really you could be doing that yourself, keeping all the cash and just making those six remittances that you need to. Same thing in your business. You want to hold on to your cash as long as you can, and pay people when things are due. Sometimes, you might be paying a little bit after when they're due if you're not in a position to manage that. 

Jason Pereira: I have to say, you're basically giving people an interest-free loan when you extend credit, and you're being given interest-free loans from your vendors. If you have an interest-free loan, why in God's name are you paying that in advance? It should literally be the dates the money arrives. This speaks to something that we often... It's interesting, it's an accounting class called Working Capital, and it comes up quite interestingly enough when we sell businesses because a lot of business owners will look at their business and be like, "Okay yeah, well I'm going to sell it for $X million," but there's $400,000.00 in cash sitting in there. That's mine also." 

Jason Pereira: I'm just like, "Eh, you might wait a second. No, it's not. No, it's not." They're like, "What do you mean it's not? I'm not going to leave him that cash." "Well, okay so if that account was zero tomorrow, would you have to put in the business?" "Yes." "Okay, so you're asking this person to buy the business and then put extra cash in?" "Oh, yeah." That's the thing, people don't understand this, but working capital, the amount of money that you have to have in the business just to keep operating is an investment. The better you get at managing that, the less of an investment it takes, and the more you can take out. 

Jason Pereira: I've come across a couple of businesses that I think are just wonderful because they have what are known as "negative cash collection cycles". They get paid in advance and then they don't have to pay for 60 days for anything they buy. It's like, oh man that's a dream. People are just giving you a loan. They're just lending you money really, for nothing. Whereas, most people are not that that lucky and if you don't understand the concept of working capital, you can either have too much in the business, too little in the business, and you're going to feel it one way or another. 

Tracey Bissett: Absolutely. When I start working with clients, I do a financial assessment for them. Traditional ratios and working capital and liquidity is certainly one of them. I'm teaching the theoretical part of it and the way we can understand it financially, but they know it felt from a pain perspective. When I tell them the number is very low or negative, they're like, "Oh yeah, it felt like that. I was scrambling to get money to pay those bills and make my payroll, or get my HST in." 

Tracey Bissett: They know how it feels. I'm showing them in the numbers how it actually materializes. If you can track that regularly on a monthly basis, you're going to be able to see the themes. You probably will have some level of cyclicality in your business, and then you can plan accordingly for different times of the year, as well as if you want to grow the business because growth is hungry and it certainly eats a lot of cash to make those investments and receivables, inventory to keep your business going. 

Jason Pereira: Also, growth also requires further expansion of working capital. It's not just the capital investment they get to make on property plan, equipment, people, whatever it is. It's the fact that now you have to carry the larger volumes of receivables and payables, and everything else. That number, maybe it was $400,000.00 before. Maybe that number's got to be $600,000.00 if you continue to grow. It just gets bigger and bigger. 

Jason Pereira: I often say to people who get this confused, "Just because you see cash in the corporate bank account, you have to understand something: that isn't yours. That's the business's. Yeah, it can be yours under circumstances, but the more you get that out of your head that this isn't your personal bank account, the better off you're going to be." 

Tracey Bissett: For sure. For those who are going to get financing... I certainly encourage anybody, no matter how small their business is, to set up financing immediately when you start your business. Especially if you're incorporated, you want to start establishing a track record for the company and a credit repayment history so that at the beginning it will absolutely be based on your personal credit score, but over time you want to transition that. 

Tracey Bissett: But lenders, when they're deciding how much line of credit they're going to give you to help you with those working capital needs, they're going to be looking for this cash flow forecast to prove out what is your peak need, when are you going to see the line go down so that they can use that to support the recommendation when they're going to the Risk Management Department and the bank. Over the years, I've ripped apart thousands of cash flow forecasts. We want to make sure they're built on reasonable, accurate assumptions. 

Tracey Bissett: It's better off to show higher usage than show something that is kind of pie in the sky. You want to establish your credibility with the bank, so you do need to be accurate in your forecast. Not that the numbers be 100%, but the assumptions made hold true to your current business. 

Jason Pereira: I had sent over a financial statement, and they're like, "Whoops, that's the wrong one." I'm like, "What do you mean it's the wrong one?" [crosstalk 00:22:01] that's what I give the bank. I'm like, whoa, whoa, whoa, whoa, whoa, let's take a step back here. I will say, let's just cover a couple of subjects on my favorite topic ever: banking. Let's not forget, anyone who's new to this and looking to start a business, understand that lending to a business is not like lending to buy a house. 

Jason Pereira: I once had a business owner friend call me up and say, "Hey, I want to start another business. If I put down $25,000.00, how much is the bank going to give me?" I'm like, "Well, they're going to take your $25,000.00, put it in a GIC, and that'll give you access to a line of credit for $25,000.00." He's like, "That's stupid. Why would I do that?" I go, "Exactly." The reality is, is that people think that in business of risk, they are not in the business of risk whatsoever. 

Jason Pereira: In fact, a lot of these smaller, more risky businesses in this country won't get funded by banks unless BDC backs the loan. In actuality, what they're always looking for is absolute security of principle. So, your personal guarantees are going to be required. Your personal assets are going to be up for grabs. The cash flow statement is valuable because that's how they look at, "What are the odds I'm going to get paid back on this thing?" Not, "What are the odds I'm going to have to foreclose on this thing." 

Jason Pereira: Both are very, very important, but establishing a long running relationship with a bank will help you in the long run, especially if you get, I would say maybe two simultaneously, because unfortunately when you decide you're not happy with your current bank, and you go to the other one and say, "Hey, I want to move everything to you," unless you're a very sizable business, the first response is going to be, "Well, we don't know you." You respond with, "Well, I'm trying to get to know you by giving you business." They're like, "Well, no. No, we don't know you." 

Jason Pereira: The credit ratings are not really a thing to them until they are ready to underwrite the loans. Apart of that, they're meaningless to the banks. That's me beating up on them for a couple of minutes. 

Tracey Bissett: Well, no I mean most Canadians forget that banks are in business to make profit for the shareholders. They're not charitable organizations. 

Jason Pereira: That's right. Yes. Given the fact that the Canadian taxpayer underwrites most of the risk, I would argue we need to nationalize them. That's a different story altogether. Talk to me, you're clearly not the only professional [inaudible 00:24:03] within this case. How do you work in collaboration with financial advisors, accountants, everything else? Where do you fit in this mosaic? 

Tracey Bissett: Absolutely. I view it as a coaching and education mandate, so working partnership with accountants, bookkeepers and financial planners to help bring up the financial acumen of the business owner. It's typically for a finite period of time we're going to go through the basics, we're going to dig into the numbers. It's really a transfer of knowledge for me to the entrepreneur. I'm going to get them to create the cash flow forecast, them to create the dashboard where they can monitor their financial results, and then we're going to dig into the pricing together. 

Tracey Bissett: But, I'm not going away like in a consulting engagement, doing all the work and presenting it to them. It's really talking through and making sure they're clear on what the numbers say, the things they want to monitor for, also coaching around how do I talk to my banker? How do I have a good conversation with my accountant, with my bookkeeper? So that you can communicate properly because these people do work for you. Unless you tell them how your business actually runs, they can't necessarily set up the Chart of Accounts, which is really the technical term for what underlies your financial statements. They can't set it up properly unless you share that information about your business. 

Jason Pereira: It's interesting. The way some business owners tend to look at accountancy and bookkeeping is a bizarre thing to me. I feel like of them expect their accountant to do everything you're talking about, but they're not. They're there to file taxes. That is their core job. Sometimes they're like, "Well, what do I need you for as a financial advisor? I've got an account." It's like, okay, when does your accountant talk to you about this laundry list of things that, like for example, we discussed on this podcast. The answer is, almost never. 

Tracey Bissett: Never. 

Jason Pereira: People there's a real misnomer for what their job is. They're absolutely important and vital within the ecosystem, but there's this belief that they're everything and that's not the truth. The other thing is that they honestly... A lot of people treat it like it is a necessary evil, like "Here's the stuff that I don't want to deal with. You deal with it. Make magic happen. Make my tax bill disappear." 

Jason Pereira: First of all, you can't make tax bills disappear after the fact. You can plan in advance to reduce them, but you can't make them disappear. Overall, I feel like what you do is more often than not missing from the entire mosaic of professionals. It's expected from different parties, but those parties are basically, "Look, that's not my job. It's not what we ever promised. It's not what we deliver." 

Jason Pereira: I'm glad that people like you exist to help people through this. 

Tracey Bissett: Absolutely. What I would do if somebody wants to create a more detailed financial plan, especially bringing all their personal stuff, I'm going to refer them to a planner or an advisor, someone who can help them set up that plan and then execute on the plan. I'm going to be in for a couple months period, work with them one-on-one, build up confidence, build on the things they're doing well, teach them some new stuff, and then they can carry on in their journey will all these other professionals that are in their ecosystem. 

Jason Pereira: Before we wrap up, we still have some time here, what are the biggest pieces of advice and takeaways? Just give me your top five, what are the things you absolutely should be doing when you want to get your hands around the cash flow of your business? 

Tracey Bissett: Number one, you have to take accountability for it. You are responsible for everything in your business, including the financial results and hitting your goals. So, you can get support to help you do it, monitor the numbers, all of that, but you have to be the one who's accountable for it. Number two, as we talked about, keep your personal and your business stuff separate. Don't make it a nightmare. Validate your idea. 

Tracey Bissett: I've seen so many great examples throughout the pandemic of people repositioning their businesses, re- evaluating products, services, pricing. Make sure you're in tune with your customers and you're watching where the market's going, and that you're moving as well. 

Jason Pereira: [inaudible 00:27:28] focus. That's the one thing, when you're hungry you can't let things go to waste. 

Tracey Bissett: Then I would say have patience with yourself, but don't be shy to ask questions. The only way you're going to improve your financial acumen is by asking. The more questions you ask, the more you're going to have, and that's okay. Start with wherever you are. I like to talk about the financial fitness journey, wherever we are today, and we can only improve. It doesn't mean we're perfect, so we've got to be kind to ourselves, but we have to keep asking questions and moving along that journey. 

Jason Pereira: Excellent. Tracey, before we sign off, I want to thank you for taking the time. Where can people find you and secure your services [inaudible 00:28:03]? 

Tracey Bissett: Absolutely. I do have a special gift to share with your audience, because we talked so much about the importance of having a regular time to review your money, having a way to sit down and do that, make it a routine. You can download a Money Meeting Agenda at BizMoneyCoach.ca. So, a Money Meeting Agenda at BizMoneyCoach.ca, and that will help you get started if you're listening today, and you know what you're doing. Maybe the first meeting you have with yourself is just looking at the agenda so that you can get started. 

Tracey Bissett: Other than that, feel free to reach out to me on LinkedIn. It's Tracey with an E and Bissett with two S's, two T's. I'd love to hear any comments or questions, and I'd love to connect with everybody. 

Jason Pereira: Tracey, thank you very much for taking the time to talk about, again, the lifeblood of a business, that is cash flow. 

Tracey Bissett: Thank you. It's been my pleasure. 

Jason Pereira: That was my interview with Tracey Bissett of Bissett Financial Fitness. I hope you found that informative. I keep on saying it, but cash flow is the lifeblood of a business, and if you are starting out and you are not feeling that good, but if you ever start to feel it, you will realize very quickly what I'm talking about. For mature business owners, you know exactly what I'm talking about. The better you can handle that, the better you're going to be. 

Jason Pereira: Until next time, if you enjoyed this podcast, please review on iTunes, Stitcher, or whatever's your podcast. Take care. 

Producer: This podcast was brought to you by Woodgate Financial, an award-winning financial planning firm catering to high net worth individuals, business owners and their families. To learn more, go to Woodgate.com. You can subscribe to this podcast on Apple Podcast, Stitcher, Google Play, and Spotify, or find more episodes at JasonPereira.ca. You can even ask Siri, Alexa or Google Home to subscribe for you.