048: Money That Works for You: A Profit First Chat with Kayla Caldwell with KC Virtual Bookkeeping

Ep 48_KCVProfitFirst_GLP_FINAL

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Jen Thyrion: [: 00:00:00

This podcast is made to equip you with everything you need to succeed from actionable marketing steps to digging deep on your mindset. I know firsthand the heart hard work, and let's be real at times of struggle that makes up this amazing journey. You wanna know what has enabled me to shine the brightest coaching plus community here at Goldie Links.

to the Goldie Links podcast.[: 00:01:00

Hey there. Did you know that we offer handmade permanent jewelry supplies? Go to goldie link supplies.com to view our beautiful chains, connectors, Bengals, and more, including our non-permanent stretchy bracelets that are available to you for wholesale. Everything is created by our tribe of mama makers.

What is a mama maker? Stay-at-home moms that create on their own time between raising their children, serving as a self-care creative outlet, and supporting their families. Your items come with signage on how these supplies are made, along with Gemstone property info, as each gemstone has a special meaning.

If you wanna level up your business with handmade. Supplies not made by a machine, but made by hand with love. Then check it out@goldielinksupplies.com. Now onto the show. Hey guys, I know I say this all the time, but you're really in for a treat Today I am sitting down with Kayla Caldwell, a Profit First expert.

keeping that really gamifies [: 00:02:00

If you wanna know more and dig deeper, you can listen to Profit First with Kayla Caldwell. It's her own podcast as well as within Goldie Link Society. She is actually gonna be in there super soon and there will be a recording if you're not there live, but. April 14th, she will be there with a special class for our members and also able to answer specific questions and dig deeper.

So sit down and enjoy this amazing numbers talk. You're gonna be excited about numbers, I guarantee it. All right. Hey Kayla. I'm so excited you're here today. This is finally happening. Thank you. We're chatting so much for having me chatting. Why don't we start off by just you telling us who you are and a little bit about yourself.

y Virtual Bookkeeping. So my [: 00:03:00

Your business specifically, and then I go a step even further and I help you build the business you actually want. Build your business around your life and not the other way around.

Jen Thyrion: I know typically I feel it's, we'll go there, but I actually first like How long have you been doing this?

Kayla Werner: Yeah, so I've been in business for almost five years now.

Okay. So just a few months shy of five years at this point. I've been a Profit First professional for about a year and a half, though I've implemented it in my business for about two and a half years. What like ignited you about Profit First

Jen Thyrion: that you wanted to head in that direction?

Kayla Werner: Yeah, so I am, I've always been a numbers gal.

it gives me my little bit of [: 00:04:00

So I was like, like most of us. Yeah. And I was in the middle of needing a change in career, so I was like, you can't be the only one, so let's just start a bookkeeping business. Over my years of bookkeeping, I found that those that actually have. A budget in place or have a hand in their numbers in some way are more successful than those that just hand it off to me and say, I don't want to think about it at all.

And, and when we wanna be rich, we gotta have a budget. We gotta have our numbers in place. So I figured why not help people, not to mention the bigger. Story that we need to be having is talking about money more. We should not need ta. Money should not be taboo, and we should be talking about it more.

rofit first has been a thing [: 00:05:00

It was amazing to the point where I knew exactly how much money was gonna come back into my own family's pocket as well. And then when I started telling people about it, as well as people started hearing it, they're like, we need a profit first professional, and you need to do this. So I did, and I've now implemented it with at least.

10 of my own clients, but it's been implemented with a million businesses worldwide and counting. So it is definitely a proven system. It definitely works. But the generic profit first system doesn't work for everybody. And that's where Profit First Professional kind of comes in and we really implement, implemented to you.

our numbers, we look at your [: 00:06:00

And so meaning how do you pay yourself first?

Jen Thyrion: Yeah. 'cause essentially, is that down to the core of Profit first, right? Is that when it says Profit first, is that really like. In the end, it's paying yourself for, because traditionally when we budget, we're thinking we need to, we get the leftovers. Is that traditionally what?

Budgeting, what does it mean? Yeah, what does the mean difference between traditional and profit first, you know? Yeah,

Kayla Werner: absolutely. So Profit First is a cash management, behavioral cash management system. So we work with your behavior specifically. So traditionally general accounting practice is sales, less expenses equals profit, and.

we think about it. In Profit [: 00:07:00

And your bracelet costs $25. That means your real revenue is a hundred dollars. So after that, we assign the dollars. So five of those dollars goes straight to profit, which is your celebratory account. Your 15 of those dollars go to taxes. $50 goes straight into your pocket, and then $35 is what's left over for operating expenses, meaning how $35 to run your business for that one single bracelet.

d your business. And of that [: 00:08:00

And so we let that fill up for every quarter, and then every quarter we take a profit distribution. Just if we were investing in somebody else's company. Every quarter we get a little payback for investing our money back into it. Same thing for us now. We just do it for our own business, so it's like a little bonus.

Okay. And of course, taxes goes to pay Uncle Sam when he comes knocking. Love it. That $50 is your owner's pay, meaning it goes directly into your personal account to pay for your everyday expenses. And then that $35 invests back into your business, meaning it pays for the software that you need, it pays for the rent that you might have, et cetera.

And this is, of course, this is just. On a general idea of maybe one bracelet and general numbers for ease of math as well. So, yeah. 'cause when you say profit,

the profit traditionally, at [: 00:09:00

That's my pay. But that's actually not for profit first. That's a bonus like you said. Yeah. So one of the categories is like paying yourself, right? And then depending on your business, like you said, are there other, some businesses that have a million different categories? That They're like, yes.

Kayla Werner: Yeah, absolutely.

So the general idea in Profit First is when in doubt add an account. So really it's just about changing the percentages. So right now, that general percentage is after your cost of sold. 5% is profit, 15, taxes, 50 owners pay, and 35 for operating expenses. And again, that's if you're making less than $250,000, there are different percentages of, generally this is a good percentage based on your gross income, and again, real revenue.

costs because you're working [: 00:10:00

Mm-hmm. You are also probably switching from a single member, LLC to an S corp, meaning you're going on payroll as well. So we play with these percentages as you grow and as your tax strategy changes. So we'll take some from taxes and owners pay and put it into a payroll account because your business is now paying for your payroll and you're having to work with these percentages for your tax strategy.

So you're maximizing the money in your pocket specifically. And then that just depends on how much is gonna be on payroll, how much are you gonna still take an owner's draw? How much do we need to truly save for taxes based on you and your family and your tax strategy?

Jen Thyrion: Man, this is

Kayla Werner: amazing.

rion: I feel like my mind is [: 00:11:00

Because I'm thinking to myself, especially somebody who, again, I've always, and I've said this a million times, even on the podcast, I'm not an, one thing I struggle with about most, and I told you this in my business' numbers, it always has been. Mm-hmm. But I think for a lot, I'm, I'm not, I know I'm not alone.

And I think you can talk to Definitely not. So if you have experience in it, or say you do have this like love of numbers like you did, maybe that's one thing. But to hear you talk about these different accounts where say you do an event, you make two grand, it's, this is the hard part. It's as a, I think typical, maybe new to business, permanent jeweler.

It's what do you do with that money? You know what I mean? It's, oh man, that's amazing. But you don't like, you're like to try to allocate that money and to like. How much do I put into buying more chain or growing or paying myself? Like honestly, and I think most business owners could say that I've never really paid myself.

I take the leftover, I don't have a set amount that I've ever paid myself. I'm gonna be totally honest here when I've just, it's not like a traditional job where they're telling you, yeah, you get paid this much and tax already taken out. Okay. There's really nowhere else to invest other than yourself because you're just getting paid working this nine to five.

t you have to put more money [: 00:12:00

I didn't have an employee before where I'm adding an employee. I'm adding rent. I'm adding these other factors I didn't have before. Yeah. It's like I, I'm listening to you and I'm like, I don't know how I would be able to do this on my own. 'cause to be honest, we, I am like going to be utilizing Kayla's services.

And, but even just to have someone, even if you are familiar though, but to have someone guide you and

Kayla Werner: make you see something you might not see. And I think that's, that leads into one of the main laws that we use. There's two main laws that we use in profit First. One of them is loss aversion. And that is essentially once you have something, you never wanna lose it.

in the future. So I'm gonna [: 00:13:00

It makes you question a little bit of DA and I and I, and so then I can come in and say. Are we sure that we need this now or can we just pay full price in six months and save the six months of subscription that you're paying for right now? That's, and that's just one example of loss aversion. I know myself, like when you're, when we're budgeting personally, right?

Oh, I just love, one of my values is eating with my family together. So we go out to restaurants all the time. And so if your one of your values is eating together, maybe we can eat at home a little bit more instead, or your, maybe your value is eating healthier, so we definitely need to be eating at home more rather than out at restaurant.

d so that it just definitely [: 00:14:00

I'm not saying if you are able to justify it and say, no, this protects my mental health. We are going to get our coffee in the morning. We absolutely are going to get our coffee in the morning. I'm not here to tell you don't do that, because not only does the coffee make you live and survive the day that you're about ready to go and do, but it gives you that little bit of confidence.

It gives you that little bit of positivity in your day. I don't want you cutting that because again, it's, it ultimately makes you a better business owner and it's going to help you survive and thrive at the same time. So I'm not here to say, oh, you're just justifying your coffee. Definitely not. But there are other expenses, especially software is the big one that I tend to see, that we justify, that we could probably figure out.

And then maybe it's not even just. Oh, I'm paying monthly for it. Maybe it's just we switch to an annual and we save a little bit of money on the long term. It's

erspective. That's, it keeps [: 00:15:00

It's like you're this voice of reason. Don't me wrong. Sometimes again, my husband's, do you need the gold toilet like in your shop? And I'm like, yes I do. And I get irritated if you're gonna challenge me on that. But maybe someone like you who'd be like, do you really need the gold toilet? And you know all my numbers.

You know where things are going. It's okay. Then it's something that it just hits different.

Kayla Werner: Oh, it definitely does. I can for sure. Being a testament to that. I have, I struggle because my husband is, business structure is very different than mine. Mine is very much virtual. His is a brick and mortar. And so we do have to have those same conversations of.

e gonna go take a picture of [: 00:16:00

Just gotta make sure it stays sparkling, gold clean. Yes. And people are gonna come and be like, I just wanna come in and see this. And then they're gonna get distracted by your jewelry and then they're gonna want something. So it's just, that is a great,

Jen Thyrion: actually, I probably should run an ad and be like, come see the gold toilet.

You know what I mean? Not even what's in there.

Kayla Werner: You're definitely

Jen Thyrion: different,

Kayla Werner: that's

Jen Thyrion: for sure. Oh my gosh. But just, and also what comes to mind when you're talking is like really just, and I talk about this, 'cause again, in the beginning of the year, I talked about how I got a new accountant last year who was just better at communicating and really putting in layman's terms for me and understanding my numbers because I've always been always a person.

I don't like numbers, I don't like numbers. So that's what I put in my head, right? So it's, it's a fear, it's a place of fear for me and like where I just don't understand it. I avoid it. Which most of us do avoid things like that. And, but once I met with her last year and it felt so powerful, like a little bit when I left, 'cause I'm like, oh my gosh, this feels good to actually understand it and realized it's not as scary as I thought.

, it lent to like me wanting [: 00:17:00

Yes. So it feels easier as you go on, you know what I mean? And now it's here. I'm implementing it 10 years in to a business really.

Kayla Werner: And so here's two things on that. One, the best day to implement it is today, of course. And it's just moving forward, right? So you can, so all your income moving forward can start in your profit first accounts, and then you can start transferring while still using your single bank account that you currently have so that you're not having to like fully implement it all at once.

th your typical percentages. [: 00:18:00

You've said it already. I haven't actually paid myself. So how are you supposed to go from zero to 50%? Right off the bat. True you're not. That is the absolute equation to failure. So what you do is you say, okay, I'm just gonna start taking 1%. I'm gonna start taking 2%, I'm gonna start taking 3%. And we, what we like to do, especially this time of year, 'cause we're going into Q2, is we look at all of last year and we say, okay, you ended up paying yourself this percentage.

start somewhere. But it all [: 00:19:00

And then you start saving the, I usually say with taxes, you start saving anywhere from two to 5%. And really a lot of my, a lot of my clients will end up being about that 5% as their top level tax because their CPA is their number one tax strategist and cheerleader, making sure that they're keeping more money in their pocket and out of Uncle Sam's, and no matter what you wanna say, our goal is to keep money in our pockets because we spend our money to take care of ourselves and our family.

on making the same amount of [: 00:20:00

You made the exact same amount. You've only owed $4,000, so you've already paid that. Now your tax bill is $0. So our goal is not to owe more money. Our goal is not necessarily to have a refund either, because if we have a refund, that means that Uncle Sam's been holding our own money that we've been having through, that we've been spending to him all throughout the year instead of having it in our pocket.

So our goal is a $0 tax bill at the end of the year.

Jen Thyrion: And I love that you said, 'cause when you said starting out, right, and that's why you think, okay, I don't need this yet, but the idea of putting just 1%, like you said, because my thought was if you feel like you're listing and you're like, no, I'm in a growth period.

here I'm like, no. I'm like, [: 00:21:00

You know what I mean? So that's what's nice to know is again, it's just something and something to start, almost like the habit, if so to speak. Yes.

Kayla Werner: And that's where profit, the profit account, the only time we don't spend it on celebrating our hard work is if we're paying down debt or growing the business because we don't wanna necessarily go into debt to grow the business as well.

And maybe we're shifting, right? So when in doubt, add an account, maybe you're adding a growth account instead of, and you're, and if you wanna take it out of your owner's pay, take it out of owner's pay. If you wanna take a per do 1% for profit and 1% for growth, or even half a percent and half a percent, when we're talking about.

you. So no matter what we're [: 00:22:00

And so sometimes, and I can tell you from my personal experience, I know from Mike Mcow, it's first experience doing Profit First as well. He is the author of Profit First is, my personal first one was a very nice big latte to celebrate my hard work. And that's okay. And that still feels so good if I use my Profit First Money.

'cause I only had $20 in my profit at the end of the day for my first quarter. And. I just, I really wanted a nice latte or $20, it's part of your manicure or whatever that means for you, and whatever that means for celebrating you. That's the big thing. As long as you are taking that money and doing it for, to treat yourself in one way or another.

e effect I feel. Or like the [: 00:23:00

You don't know where coming, where it's going, there's nowhere you're putting it. There's no plan. And same if you feel like you're in this place in your business. Where do I wanna go? I don't know. I could do this, I could do that. But it's okay gaining clarity around that of what, where you wanna go and how you wanna feel and what your day wants to look like.

It really is the same concept too with your money. There is a different feeling behind putting it into that account and just treating yourself when you feel like, oh, I deserve that. You know what I mean? That is something I earned and if I had a plan, I stuck to it. That feels good and powerful or something.

But hits for sure.

d is because you need to pay [: 00:24:00

Now it's assigned to operating expenses. Now it's assigned to your personal pocket, making sure that there's food on the table, and now it's assigned to paying Uncle Sam. Now it's assigned to also celebrating your hard work or paying off debt or growing the business, whatever that might mean for you and your business.

And the other part about that is it's already assigned. You can dream up whatever you want it to be, basically. So if you want to spend more money in your business, you absolutely can. If you wanna invest in a new computer, you already have. I already have a route per se there. Now the other law that we talk about in profit first is Parkinson's law.

dollars. Now, the whole idea [: 00:25:00

Yep. If you have only nap time to work. You're gonna get all your work done during that nap time. If you have all day because the kids are at daycare to get all your work done, you're gonna take all day to take that same amount of project time that you use in that nap time. Let's be real, but you, maybe you'll take a little bit more personal time in the middle of the day, which is.

Even better, right? So we just have to figure out how do we assign the time and how do we assign the dollar, right? So when you're thinking about it and you're like, okay, if I were only to have $35 for this a hundred dollars project at the end, like how am I gonna actually do this? This is where we've used, we've talked about this briefly in the past, is how do we gamify our money?

whatever's left over is what [: 00:26:00

Jen Thyrion: Yes.

And if you're a person like me who, 'cause actually a podcast episode I did recently with Stones and Findings, she's amazing, Dana. And we, she's talked about gamifying and we talked about this and she talked a lot about, she's been in business for quite a while talking about the difference between people that are successful that are not what you know.

And, and it really, I kept saying as a person who always says, I'm a creative, I'm a creative, numbers are not my jam. But you can gamify, like you said, you can make this exciting and fun because when you talk about it. I literally do feel like excited about it, whereas I never thought I would ever say that about numbers.

So it it, it feeds into that creativity. Like it just makes me think, like you said time. I say that all the time because I have to say before I had kids, okay. I remember I, I had my shop already and I was actually one of my good friends, dear friends, she already had two, she had two small girls, probably around the same age as my girls now.

's, and she's like, you just [: 00:27:00

But, but yeah, it was same concept. Like I remember during Covid when the boutique and everything shut down and I felt like I was trying to just scrape. I was literally like going through my pantry using food that I didn't even know was in there. It's like that same thing, okay, I don't have as much money to get groceries, but I'm gonna get creative and make a dish that of something outta my freezer and in my pantry.

It's like Absolutely. You make it happen, like with when you're down to the wire and you don't have making it. Yeah. Yeah. So yeah, and that's a phrase in our

Kayla Werner: family, we're a double entrepreneur household. We've been through it all. We've struggled with money ourselves, like we've gone through it. Yeah. But we've always said, we've always figured out, and we are always going to figure it out.

tually comes from the Profit [: 00:28:00

And so they're like, okay, I guess we're going to Home Depot and we're figuring out how to cure leather with a hundred dollars. Sure enough, they did it. No way they did it. Yeah. So now they have a patent pending or an actual patent for this new leather curing process that only costs them a hundred dollars, which used to cost them thousands of dollars to do.

And so I think that this is the best example of we just gotta get creative. We just gotta implement it in order to take care of ourselves first. And let's be real too. We know, especially as moms, when we don't take care of ourselves. We are not good moms if I haven't filled my cup and or let's not even, let's not even call it filling in our cup because let's be real, we still fill their cups before we fill our own cups.

or if we have not had a deep [: 00:29:00

We're not gonna want to show up anymore, and it's not gonna want us to fuel that resilience that we have to have as entrepreneurs to continue. If we are not paying ourselves first, if we are not putting food on our own table first. So we just gotta figure out how that works. Yeah. For us. And so if we start paying ourselves first and then we start getting creative with the what's left over, we're gonna thrive.

r I'm not gonna do it at all.[: 00:30:00

And I've always been just a victim of that thought, of that way of thinking. And so for me, that's, I think, plays in my numbers too. I'm like, like I, I don't wanna like just dip my toe in and try like, I'm like, no, I need to be totally dedicated and I'm not gonna do it until I feel like I'm ready. And when really, it's like even the same concept of working out.

But honestly, if I just chose to take a 10 minute walk versus sit down, I mean that all grows and it's okay, I'm feeling good now. I wanna add some time. It's better than nothing. Like it's all about consistency, right? And letting that grow and the feeling of the pride that comes along with that. And like the confidence.

Okay. Sticking to something and knowing I'm intentional with my time and my body and doing something good for myself. Same concept. Yeah. And this

Kayla Werner: system is meant to grow with you. Yeah, as well, right? So like you and the reality is that you're the, what I like to call the profit first table of targeted allocated percentages.

would we want to go towards [: 00:31:00

We're also going to go through that transition time of single member to payroll. We're gonna go from solopreneur to having a team. We're gonna go to this. And this system is meant to grow with you. And it also means. Our tech strategy is going to change in all of those phases too. So our percentages are going to change as our business changes, as our business grows.

her companies that they have [: 00:32:00

Yeah. So they're gonna be lower months and higher months. And so we need to save those percentages from those higher months to make up for those lower months. And then there's people like me that I just, I have six accounts. I keep it simple and dust, and that's just because personally that implementation makes it easier for me.

But I've starting to get into the point where I'm like, okay, I do see the benefit of adding an account. I've added payroll, I've added a retirement account as well for myself. Oh, perfect. The other part about that too is we're looking at these different accounts and the different percentages is, my percentages don't look like your percentages or anybody else.

ple money gives them anxiety [: 00:33:00

Jen Thyrion: So true. And 'cause everyone talk about even like sharing numbers, like gross number, the actual in your pocket could be very different from from one person to the next. If they're both making 500,000 a year, what are your expenses? One person from one, two, and three, that number can be impressive. But really in the end, like there's plenty of people that are making that money that have zero in their pocket.

Exactly. Do you ever watch Tank? Do you ever watch Shark Tank? We made 5 million last year. And how much do you pay yourself? Like zero, $10,000 a year? Or they're in major debt so you have no idea. That's why it's, and that, that

Kayla Werner: lean into, you're looking for investors, you're looking for to sell your company one day.

am is if you're working hard [: 00:34:00

Do not worry about what Instagram says, but if one day your goal is to eventually sell your business to somebody because you have recurring clients or whatever that looks like, right? You, you need to be able to pay yourself because you, there's two things that people look for, essentially is they know they're gonna have to replace you.

So how much do you pay yourself? Because we're gonna have to pay somebody else for that same position when we let you go on your merry way with your big old check that we've sent you off with because we've just bought your business. And the other thing is, are we profitable? Am I gonna make money after paying for your replacement?

s all these different things [: 00:35:00

Jen Thyrion: No, that's a great point to make. I'm glad you brought this up because I didn't even think of that. And most people that are listening, they're like, oh no, I would never, but it's like all these things that, you know, you never know.

Kayla Werner: I would've never said I had, I was gonna have a team one day. I would've never said that.

I've said a lot of, I would never, I would never have been an

Jen Thyrion: entrepreneur six years ago either. Yeah, no, it is why it's, yeah, I can have a long list of nevers that I, that's why I'm like, never say never, even though I catch myself still saying that. But again, it's like that's what's so great. 'cause like you said, yeah, if someone wanted to buy my business tomorrow, I would be like, I'm bringing in this much about a here.

And there wouldn't be any hardcore like evidence and like numbers to give them, to convince them to finalize that. So, yeah,

em their numbers and they're [: 00:36:00

But like the people that they actually invest in, they know their numbers and they have them right off the top of their head. And some of 'em, I'm very impressed that they actually have the numbers off the top of their head. That's a lot of studying before going in front of those investment press. I

Jen Thyrion: can go on a Shark Tank tangent, but I'm honestly shocked.

Again, I'm a numbers person, but I would know The Shark's gonna ask me. So that's what's always amazing. I'm like, come on, do you really not know? 'cause you know where you're at. Right? You know who's gonna ask? They're gonna ask you that. But I know I'm really impressed too. And actually I have to say I've learned a lot from Shark Tank when it comes to numbers and like all the things too.

Like it's actually pretty cool. I love it. My girls, actually, I'm not kidding. They love Shark Tank too. We watch it. We do too. Hey, busy entrepreneur. As you know, being a business owner, you have to wear all the hats. You're a social media manager, marketer, graphic designer, accountant, photographer, videographer.

y call to talk about all the [: 00:37:00

Canva templates, monthly business expert, monthly training support. Support group discount and first dibs on Goldie Link supplies and more. My intention is to create a beautiful community of permanent jewelers that wanna level up their businesses together while creating lasting friendships and having fun.

This is what I wish existed when I started my business almost 10 years ago. If you wanna know more, check it out at goldie link's society.com or at all the things permanent jewelry.com. I hope to see you there. So what do you feel like, so when we talk about accounts, I wanna say this out loud because you're talking about physical accounts, like opening different bank accounts, correct?

That is correct, yes.

ttom or whatever, because my [: 00:38:00

It's the same thing with bank accounts. So we, we actually do, as we funnel all of our income into an income account, and then so and so we just renamed the income accounts. And so income account is just income account number one, basic circle or bank account number one. And then for you, what I would strongly recommend is we have an extra, two more accounts.

So we would have a cost of goods sold or a jewelry buying account, right? And so we funnel X amount of whatever that is into that. So let's say we got $125, so that means $25, it goes into that account, and then let's make it even easier on us. And then let's move this a hundred dollars that's left over from that sale into a real revenue.

it account, whatever percent [: 00:39:00

And these are like your basic income accounts or basic bank accounts that you would need. So you need approximately seven bank accounts to start, and then when in doubt, you'll add an account. Two points to this banks. Hate having your bank account balance be zero and multiple of your accounts will go to zero multiple times a month, multiple times a year, et cetera, because you're gonna be moving these around a lot and moving this money around a lot.

months at a [: 00:40:00

Then the other ones are going to fluctuate as I pay myself into my personal account as I, and as I pay for the operating expenses and as I pay for jewelry or stock or cost of goods sold as I pay for those. So those are all gonna go to zero. So your bank has to be essentially okay with that. The official profit First Bank is a relay, and I love it.

It's been super great. I've only had a couple complaints from my clients that have switched over to Relay Credit. Unions are also really great with this as well, because they don't charge those fees for going down to zero. So I absolutely love Relay as well because it, you can actually make automatic profit first rules.

it does matter that you put [: 00:41:00

And then the other part is that I do strongly recommend, especially at least for the first quarter, and we change these percentages every quarter if we're feeling like it's. We're feeling good or ready to cut more expenses or ready to pay ourselves more, whatever that might mean. So for at least for the first quarter, I strongly recommend you physically do those transfers twice a month.

I personally like to do it weekly because it just makes more sense for me and that's when I do my bookkeeping. But if you, your typical bookkeeper will tell you twice a month, the typical profit first rule is twice a month. I think it's the 10th and the 21st is their recommendation of when you do these transfers.

kay, I make a lot more of my [: 00:42:00

So I might need to do a few more events at the beginning of the month or something like that. So you can see the rhythm of your money coming in. And the flow.

Jen Thyrion: So if you haven't read Profit First, I actually, what I enjoy about it is that he tells a lot of stories about like different businesses. So you already shared one about the leather company, but what what brings to mind, and we did kinda share the difference between obviously like the standard compared to Profit First, but he shares so many stories about people paying off their debt and pretty fast.

Why, again, I guess the core of it. Why do you feel like there is a difference between that person being able to do it when they were obviously operating their business prior? Do again, do you feel like it's just the mindfulness and intention behind the money that's being spent or I think it's the physically doing it.

Yeah. It's

ut you're moving hundreds of [: 00:43:00

Also because you're writing down your expenses. And when I like to write down with my expenses with my clients, I like to budget for their, like in your case would be their jewelry costs for the year. I also, if they wanna invest in something like a computer one day, then we put that in there too. We use it as like a dreaming budget to say, okay, can we get all of the things we want based on how much money we make?

Basically. And so if your monthly nut comes to $10,000, that might, that means that you need to make $120,000 gross by the end of the year so that we can sustain everything you want. But if it comes to $10,000 and you're really only making $5,000 a month, then we need to look at some things and maybe take out some of our dreamy expenses for now.

But it [: 00:44:00

So that's, we just, and how do I do that while protecting my mental health and protecting the core part of my business? So your core part is to make sure that. Your client is super freaking happy with their jewelry that they keep coming back. So how do we protect that with your expenses? And if your expenses are just because you want it, sorry.

But that's gonna be the first one to be cut.

Jen Thyrion: Yeah. Just like I said, keeps going back. I keep going back to the words of intention and stuff because it's like even when people are like, not sure what, maybe they should price something at, this is the thing. There is, I believe again, a an industry standard Yes.

permanent to say that as you [: 00:45:00

Kayla Werner: there should be, because you don't want somebody way underpricing you and then bringing the entire industry down. So you need to have an industry standard for sure. Thank you. Yes. But

Jen Thyrion: when it comes to pricing and when you're above that industry standard, or at that industry standard, and you're comparing, like you said, so much of going back to the things on Instagram and whatnot, you're just, we're just inundated with so much stuff now and so many people's different lifestyles and thoughts and opinions and oh my God, that you just, you find yourself a little bit, whether, not even intending a little bit of, I don't know, just feeling like your comparisonitis or FOMO or whatever you wanna call it, right.

But it feeling like, you should be doing this, you should be doing that. So even when it comes to pricing, it's really hard to ask somebody else what I should price, because it's, it depends, again, on all these factors. And if you do your numbers like you're saying and you're like, you get down to a place where you're like, okay, wow.

look different again, prior [: 00:46:00

Yeah. Versus now. I pay rent and I pay an employee consistently. So my prices, you can't compare my prices if you were, 'cause I raised my prices, which you would guess, right? And because my business looked different before I have, my numbers look different. It just, there's so many factors in pricing and what people's numbers are and you can't compare that also where people buy their chain.

Are they buying a major bulk? Are they getting actually their chain much less than you are? Like there's so many different factors. So to compare, as long as you're above that industry standard or at that, it doesn't really make sense to be just like looking at what everyone else is doing.

Kayla Werner: Yeah. And there's two parts though.

rather [: 00:47:00

So that's the fastest way to also get some of your money back, is really looking at that cost. But the other part that I was going to say too, with all of this in the percentages is if I could give myself any sort of advice, go back to myself five years ago when I'm looking at pricing, is you may not think that you want a team now and you're never going to have a team, but you might someday price as if you are a firm or in your case price as if you have a team price as if you have a brick and mortar one day, because you're gonna want that eventually.

And maybe you don't, maybe in five years you, you decide that you just wanna do all these popups and you don't want a brick and mortar, but. Prices if you want it one day, and then save the little extra money for a rainy day, or save that little extra money for a de security deposit, save it for a family vacation, whatever that might be.

But prices, if [: 00:48:00

Jen Thyrion: I can't agree more. And it goes along with just a lot of things like setting up, even speaking about even implementing this, if you feel like, oh, I just want this inside hustle. I don't need this. But really in the end, again, you never know, and you might fall in love with this and it might be this huge business in three years and you have no idea.

Yes. Okay. You might never think you wanna quit your full-time job as a side hustle. You, I can't tell you how many times I hear this actually. So it's treat it like, even if you think, but if you have enough interest to start as a side hustle, just treat it like it's a legit business. It's not just a hobby, it's not a glorified hobby.

Set up all these things from the beginning and treat it like, yeah, like you said, a firm or whatever, a big

Kayla Werner: company and maybe for three months you do it and you're like, okay, I am just gonna do it under my name. I'm not gonna set up an LLC yet. I'm not gonna spend the extra money, but let's just. Do it for three months and then let's see, and then after three months make your decision and then there you go.

, when you're still thinking [: 00:49:00

The more money you put into it now, the more you've invested in yourself and that you're gonna actually commit. It's the same thing with going to the gym is I could give you a free gym membership or free thing, but you are the only one that's gonna fully commit and you're only gonna commit if you actually are spending the money to do it.

Jen Thyrion: Agreed. I can't say about that even more. I can attest to that completely because when it comes to, you can literally look up anything on YouTube these days, but then you can also take an intentional course that's gonna keep you accountable. Or a coach, like even this, I could read the book and not to say you can't do this 'cause you can't.

to spend, and I'm like, Ugh, [: 00:50:00

Get educated and speak to someone who's going to assist me and hold my hand through this. So it's definitely gonna be a different impact for sure. And I'm gonna feel more invested. If I'm spending X amount of money for this service, I'm gonna wanna take it seriously versus try to do it myself, which I mean, and knowing myself with this particular thing, for sure, it makes sense.

I've spent as up to $20,000 a year for a mastermind. And do you think I spent, I treated that way differently than I would if I would've, again, it was a free thing for sure. I would've not shown up to things I would've not completed. Things like totally different impact for sure. Yeah, it's almost, and even going back to what you were saying about why the success of Profit First versus a traditional quote unquote, it's like you were saying, you're like really have your hand in and see the numbers.

It's almost like what I had a thought of is if I have cash. It, it goes way faster Yes. Than my, than my card.

Kayla Werner: [: 00:51:00

Jen Thyrion: Do. Oh my gosh. Okay. So it's the opposite for me. Yeah. Because I feel like if I see the actual number good on my account, it's like, for me it's more legit. And if I just have, because I never have cash. So when I have, I feel like it's, ooh, it's, this is like almost like free money because it's not in my account.

And I like, it's like it's just, I don't know, like I don't even own it or something. Like I can just easily freely spend it. I don't know. So it's, it's so funny. Like the mindset behind Yes.

Kayla Werner: And that's why this whole system is completely tailored to you. And that's why working with somebody like myself as a profit first professional or a coach or of any sort is you have that second set of eyes to really tailor it to you and your business and your life.

pay for this in my business. [: 00:52:00

Jen Thyrion: Um. And I can't tell you how many times I do that, how many times I'm like, no, I'm at the GEM Show on Friday.

And I'm like, I had this budget, but I actually, I'm justifying buying these gemstones. You know what I mean? Because I've really convinced myself I really need them. And I, I say all the reasons in my head of why I do need them, whereas, but if it's not coming from this one account, 'cause again, it's coming just from my account, a general account, right?

Nothing is in different accounts right now for me. And I will share my actually journey. I feel like I'll do a follow up to this because knowing the more too, again, with spending money and investing more, there's more on the line for me with having a brick and mortar, having a rent, having an employee.

or [: 00:53:00

Right? And, and that's

Kayla Werner: like the, that's the whole removing temptation. And if we are robbing Peter to pay Paul, meaning we're taking our taking from ourselves, we're taking from profit, we're taking from taxes. We know that we are actually robbing Uncle Sam. We know that we're actually robbing ourselves basically in order to grow this business.

But it's also the quickest way to see where we're bleeding. So if I am having to constantly, I am overspending in operating expenses or I need more money out of the business, so I'm gonna just take a little bit more, okay? Then we need to figure out what's where, where is that going? So let's just say that we've overspent in operating expenses.

're taking a little bit less [: 00:54:00

That doesn't mean three, six months down the road when we're, when we have a more sustainable income or we have a better plan in place for that income coming in and more income coming in, that we don't have to change it right back. That's the beauty of it, is that we're constantly changing these percentages every single quarter.

And I can tell you too, from my own experience as well as my, my client's experience, we don't always change those percentages. Sometimes it feels good to be comfortable for another three months because these percentages feel good, and in three months we can adjust. Then, especially when we're going through a lull in our business or a downward cycle or our slower season, then we can stay at the same percentages and we can worry about cutting expenses here in the next three months or whatever that might mean.

to be a little comfortable, [: 00:55:00

Jen Thyrion: I love, I think the things, I like to sum it up, what I love about this and what I get excited about is, like I said, a, the creativity, right?

The mindfulness, knowing that, okay, I am just being, there's power behind that and being intentional. I feel like there's so much power behind being intentional. I really do. It's, it lends the clarity. It just gives you, it makes you feel confident and not only like just the confidence, but the fact that it molds to your lifestyle.

That's what I was gonna say. It's, I just think it's all that we were talking about before with Instagram of thinking the shoulds and, and again, everyone asking like, what do you price? So, or thinking the next step should be this, right? Ultimate goal should be brick and mortar. That's not for everybody.

om with every single person. [: 00:56:00

All our lives are so different. Our time looks different, our lives look different. Everything is so different. So this is so great 'cause it makes you really look at your own situation without trying to get outside answers from the next person who might even have the same business as you, which is great to bounce off of.

But you have to know you can't adopt exactly what they're doing because it is not you. So that's what I love about this. But your values

Kayla Werner: are different than theirs as well. Your tax strategy is different than theirs. The it, there are so many different factors in all of this that you really cannot play the comparison game.

. It's so easy to get caught [: 00:57:00

Oh, I should have a house by now. I should be making this much money by now. I should have this much saved by a retirement by now. Yeah, okay. You probably should. Whatever. But life happened, COVID happened. There's all of these different things that have thrown us through the freaking ringer, and it's not as easy as it was for our parents because it's a very different economy.

It's a very different everything. And the reality is, is we have to be resilient and we have to do what's right for us and our values and my values are not the same as yours and so on. And money is so much a. Value indicator, where are you spending your money, is what's gonna show you exactly where your values are.

ou feel about money and your [: 00:58:00

Oof. That's a lot of money. Or I spent a thousand dollars on my ski pass. Cool. Awesome. I am not worried about it. That is a family time. That is time that we are going to spend. So a thousand dollars can be feel so different when we're talking about our values that it's okay, I'll easily drop a thousand dollars on my ski pass or on that ski trip or whatever and not even worry about it.

But if I think about the other way, where we own a gym, so we obviously care a little bit about our nutrition. So a thousand dollars out to restaurants where we're eating like crap and having all this yummy. So good food. By the way, I'm not shaming because I love my food, but it feels different. It feels okay.

I probably could have [: 00:59:00

Jen Thyrion: Yes. And I feel like the whole thing with, should I remember like the whole quote, like you shouldn't be shoulding all over yourself. Mm-hmm. Or something. Mm-hmm. I heard that. Okay. Because in the end, the shoulds, it's if you find yourself saying that, it's like it because it ends up leading to, and this is why I think money is hard for people to talk about because there are a lot of emotions tied into money.

We need money to survive. Okay. And work and live. And I think there's a lot of shame around money. And so the whole thing with it leads to the shame I should be at this place in my life. I should, first of all, who set those rules, first of all. So challenge that, but also it's, if I feel that way, what can I do to, rather than using it as a shameful thing?

ke we should be further with [: 01:00:00

Kayla Werner: Yes, I truly feel that way. We all do. We all do. And there's two parts to that, right? Is. I am going to go a little feminine strong on you here is that a lot of the shame that society puts on us is on female products. It's on our coffees, it's on our hair, it's on our nails, it's on our clothes. Do we ever see shame on men for going to their golf game?

Do we ever see shame on men for buying the season tickets? No. They're celebrated. So the reality is, and let me tell you how majority of us. If we were to add up all the dollars on how much money we spent on our coffee, it's not gonna make us a freaking millionaire because we should have been putting that, should have been putting that money into a retirement account.

akes you survive in the day. [: 01:01:00

So there's two things when you put your money down on. When you look at it in reality is look at how you're feeling. Is it your feelings or is it somebody else's feelings projected on you? And two, those are the feelings that help you figure out what your true values are as well. So it's, there's so many things around all of this shame that are just plain out dumb.

Screw them. Okay.

, and I'm like, I don't know [: 01:02:00

We just, because this is the way we just think this is the way things have been. This is the way my parent, this is the way we were brought up. So to actually, that's why I love the idea of like really always stopping and thinking and asking yourself. Questions. Because even if there was a point in my business where I just wasn't really happy anymore and I was like, but I felt God, I was making decent money.

n my values that year. It was: 2020

as a local mastermind here in: 2020

for me. So if, like you said [: 01:03:00

I would much rather spend a thousand dollars on a piece of equipment for my business or gemstones than a pair of shoes for myself. Mm-hmm. I'm not somebody who, I'm not someone like I will invest in a piece of jewelry, be even for myself even, or something in my business before I invest in like a handbag because that's what I value.

But, and then so when people come to say you're permanent jewelry and you're out, and they're like, oh my God, I would never spend $75 in a bracelet. And that's because they just don't something. That's okay. You're not gonna convince them because that is something they don't value. And some people will get their nails done every week and spend however much money to some people.

That's crazy. So it's, it's just, yeah.

't know what your enough is, [: 01:04:00

One and two, the biggest thing when it comes to money is time. And so the later you wi you, you start the later your amount of money is. And the great example I think is Warren Buffett. He actually started investing way later in his life and had he started earlier in his life, I think his net worth would've, I think.

r a day or whatever that is, [: 01:05:00

Which is why I also tell people if you're gonna start and you're too overwhelmed with it, start with just two accounts. Keep your current account, use that like you normally would, but then start saving 1% for profit and at least 2% for taxes. So that way you're saving something. And our goal is would be at least 5% for taxes by the end of the year and, and start, and you'll start seeing that I have a client that she did that herself, just those two accounts.

And that's what made sense for her. And she ended up saving enough for two things actually in the last year of working with her as her husband's wedding ring and their honeymoon.

Jen Thyrion: Amazing.

Kayla Werner: Easily. Amazing. No problem.

Jen Thyrion: Yeah. Oh, I love this convo. I know. We're probably like, we could talk for hours because again, there's so much as I believe in everything in business, it's more than just the concrete stuff.

, I truly believe things are [: 01:06:00

But B, it's if you don't think you deserve the money, you're gonna spend it like an idiot. And because you don't think you deserve it. Oh my

Kayla Werner: goodness. I'm so glad you said that. 'cause that is the first step to all of this is you deserve it. And you have to know that to your core. Yes, you absolutely have to know that to your core.

So I will shout out my money mindset Coach Kelly Ruda. She is. Freaking amazing. She started out in therapy and then switched over to money therapy, is what I like to call it. I love, love that. Oh my gosh. For the unconscious millionaire, basically, because we are getting in our own freaking way at the unconscious level and you are like, Ugh, I can't, I cannot.

my thoughts. Because at the [: 01:07:00

Absolutely. That is the absolute first step. You have to believe you deserve the money.

Jen Thyrion: Yes. I can't say that. It's almost, what is it? I'm trying to equate it to something else where it's like taking a painkiller for something that you're not finding the core of the pain. You know what I mean? You're not actually remedying it, you're just trying to cover it up.

So it's almost, again, yes, you can implement all these things, but what I'm trying to say though, implementing these things and being mindful and actually even finding maybe help with someone like you is going to uncover those things. Because it's gonna be like, why am I always trying to dry myself to zero?

Because I can say, even when it comes, we can say even about relationships. I can say this about myself, even though we feel like, God, I hate being broke, or there's so much discomfort in that. But we find comfort in the discomfort. It's, it's what we're used to. So it's, it's like almost we get addicted to the drama, right?

ing money. I have to be like [: 01:08:00

Maybe I don't feel like I deserve the money. That could be it too, right? But also, I'm just, it's like an uncharted territory. So to work through those things a little bit and be like, be eyeopening to be mindful with your money, it's gonna bring up those things to realize how you're spending your money, right?

Oh yeah. Okay. Anyway, let's stop here because we could talk all day, but where can we find you? Tell us all the things. And I wanna say really quick, you're gonna be inside our membership, which is so exciting. So I think when this comes out, it might be actually the following week 'cause we're gonna, but you're gonna do a special, just dive a little deeper inside the membership and be able to answer questions.

So if anyone is interested in that, they can check out the membership to, and there'll always be a recording, obviously, if you end up joining afterwards. But anyway, take it away. Yeah,

fic to you guys. But you can [: 01:09:00

I'm KC the letters V bookkeeping. So my actual company name is KC Virtual Bookkeeping. My initials Kayla Caldwell. So KCV bookkeeping at Instagram. Please feel free to send me a dm. I'm always happy to answer questions. You can also find me on LinkedIn, Kayla Caldwell, and I'm also on Facebook as well as K Virtual bookkeeping.

But I, my favorite place to be is on Instagram.

Jen Thyrion: Same. Okay. Alright. Thank you so much. This was so informative and inspiring and I'm feeling, I'm feeling empowered, so I hope everyone feels the same. Get down to your numbers. Yes,

Kayla Werner: absolutely. Thank you so much for having me, and I am so happy to spread the build your business around your life and not the other way around.

de and you walk away feeling [: 01:10:00

Okay, I will see you next time. Have a golden day.