Beginning Balance
99 episodes - English - Latest episode: 15 days ago - ★★★★★ - 60 ratingsJesse Mecham and Mark Butler teach you how to manage your business cash flow, hone your business model, and not freak out about money.
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Episodes
A World Without "Email," Mark Actually Likes a Book
June 03, 2022 06:00 - 27 minutes - 25.5 MBCan you imagine it? Mark and Jesse discuss Cal Newport's book A World Without Email, which urges workers, especially knowledge workers, to rethink their work in terms of process and systems. Good processes make us more efficient, but more importantly they allow us to engage in deeper work and be more creative as a result. Good processes and systems don't just happen, however. Typically they are emergent, and it is so easy to fall into a mindset of "it's working, and I always do it this...
Q&A: Can You Run a Coffee Shop on YNAB
May 27, 2022 06:00 - 17 minutes - 15.9 MBMark and Jesse answer a question submitted by a listener wanting to know if he could run his coffee shop books in YNAB? Jesse has recommended in the past that businesses with inventory run YNAB in parallel with their normal bookkeeping software, but he and Mark agree that a coffee shop, although it has inventory, is a great candidate for YNAB. Question for Mark or Jesse? Email the show at [email protected] Mark Butler, Virtual CFO https://markbutler.com https://letsdothebooks...
Scarcity by Design: The Four Day Workweek
May 20, 2022 06:00 - 32 minutes - 31.4 MBMark shares his practice of taking quiet days, quiet weeks, and (eventually) quiet months to find clarity and focus on bigger questions and problems. Jesse explains why YNAB recently decided to implement a four day workweek, and how scarcity of time can actually drive productivity. Mark Butler, Virtual CFO https://markbutler.com https://letsdothebooks.com You Need a Budget https://www.youneedabudget.com
Profit Sharing: A Tool for Employee Alignment or a Dangerous Precedent?
May 13, 2022 06:00 - 32 minutes - 31.2 MBMark recounts a recent conversation with a client in which she wanted to create a profit sharing arrangement with an employee who had previously only worked for a standard hourly rate. The idea was that the profit sharing would incentivize this employee to do a good job, since the better the product sold the more money she would make, thereby "aligning" her compensation more closely with the company's goals. While in principle this is a good idea, Mark and Jesse both point out the dang...
Focus, the Pickaxe, and Mining the Vein
April 22, 2022 06:00 - 26 minutes - 25.6 MBMark explores his anxiety around staying in the same business for several years, and why he has finally come to peace with staying in one lane and executing his book keeping business. Mark Butler, Virtual CFO https://markbutler.com https://letsdothebooks.com You Need a Budget https://www.youneedabudget.com
Marriage and Partnerships
April 16, 2022 06:00 - 27 minutes - 26.3 MBThinking about a business partnership? Well, think long and hard about it, because entering into a business partnership is a lot like entering into a marriage. Good partnerships require effort, resources, and a high level of emotional intelligence. Put simply, they add a lot of complexity to the task of running a business. This doesn't mean they aren't worth it, but Mark and Jesse urge extreme caution before getting married to your partner! Mark Butler, Virtual CFO https://markbutler...
How to Do YNAB in Your Accounting Software
April 01, 2022 06:00 - 22 minutes - 22.4 MBMark and Jesse explain how you can incorporate YNAB and the Four Rules into your business without changing your accounting software and without making your accountant grumpy! Mark Butler, Virtual CFO https://markbutler.com https://letsdothebooks.com You Need a Budget https://www.youneedabudget.com
W-2's vs 1099's: Don't Mess It Up!
March 25, 2022 06:00 - 23 minutes - 23.4 MBAt some point in their growth, most businesses will need to hire additional help. Often businesses begin by hiring contractors to offload some of the operations from the owner, which are paid as contractors and issued a 1099. As the business continues to grow and the need arises for full-time team members, those contractors sometimes become defacto employees, and therein lies the trap! It's vitally important to understand the difference between a W-2 employee and a 1099 contractor. The...
Realized vs Unrealized Debt: Rule Two by Another Name?
March 18, 2022 06:00 - 35 minutes - 34 MBMark points out that liabilities on the balance sheet don't necessarily reflect all the liabilties a business (or an indivudal) has. Following Rule Two (Embrace Your True Expenses), there are known long-term, non-recurring expenses that will come up in a business. Operating with no debt on the balance sheet is a wonderful thing, but without sufficient reserves for those non-recurring expenses... Mark argues you are still carrying debt. It's just unrealized debt. It's not on the balance...
Mark and Jesse Share Their Investment Asset Allocation (Secrets Revealed!)
March 11, 2022 07:00 - 26 minutes - 25.8 MBMark and Jesse share their personal investment asset allocations, and discuss the role of risk, risk tolerance, and emotions in the investing life of a business owner. Jesse explains how his personal risk tolerance has changed alongside the growth of YNAB, as his net worth became more and more tied to the value of the company, and how that has influenced his ultra low risk investment portfolio. Books mentioned in this episode: The Little Book of Common Sense Investing by John Bogle ...
If Your Business Isn't Growing, Is It Dying?
March 04, 2022 07:00 - 28 minutes - 27.2 MBMark and Jesse tackle the common business saying: "if you're not growing, you're dying!" Is that really true? And what exactly does growing and dying mean exactly? Mark Butler, Virtual CFO https://markbutler.com https://letsdothebooks.com You Need a Budget https://www.youneedabudget.com
Messy Books... Messy Business
February 25, 2022 07:00 - 25 minutes - 24.6 MBDo you cringe when it's time to close the books? Are you frequently frustrated by an accounting problem, or certain tasks your bookkeeper is asking you to do? You've got messy books, and as Mark and Jesse argue, it likely means you've got a messy business as well. Accounting should be boring and repetitive, Mark says. When onboarding new clients for his bookkeeping business, he spends a lot of time upfront gathering information and creating systems so that, a few months in, the account...
How to Do Meetings Right
February 18, 2022 07:00 - 31 minutes - 30.5 MBGather round folks, let's have a meeting... about meetings. Many people hate them, but they are a necessary part of business communication... and unfortunately meetings often become disorganized and bloated, leaving employees frustrated and less willing to invest their time in preparing for and participating in meetings in the future. Jesse thinks meetings get a bad rap, however, and offers some suggestions on how to run more effective, efficient meetings in your business. Mark Butler,...
An Inside Look at Hiring at YNAB
February 11, 2022 07:00 - 17 minutes - 17.4 MBMark and Jesse discuss the hiring process at YNAB, where the stacks of cover letters are deep and competition is fierce. How do they differentiate candidates in the first round? How do they weight employee referrals? What's the most important factor in finding the right "fit" in the final round of applicants? Jesse answers these questions and explains why hiring managers should be excited about every hire they make. Mark Butler, Virtual CFO https://markbutler.com https://letsdotheb...
Battling New Shiny Syndrome
February 04, 2022 07:00 - 24 minutes - 23.9 MBThere are some common sayings in the business world -- "if you're not growing, you're dying" or "innovate or die" -- that suggest business owners must always be looking for the next big thing that will propel growth. The truth is, it's HARD to find things that will move the growth needle. Whether it's new menu options at a restaurant, new services or products, or ancillary things like customer educational resources or new marketing initiatives, there are any number of "new shiny" things that...
Leading Indicators for Growth, and A Little Groveling
January 28, 2022 07:00 - 31 minutes - 30 MBMark and Jesse discuss the best indicators for determining why your business is growing, and how to grow it in the future. These are very different from trailing indicators, things like the P&L which summarize what happened in the past. Understanding what actually drives growth in your business is difficult work, but it's crucial work. Too often, business owners end up spending lots of time and energy on projects which are easy to measure and easy to implement, but don't actually drive busin...
Your Team Isn't Your Family
January 21, 2022 07:00 - 22 minutes - 21.8 MBA lot of companies are fond of saying this about their employees and their work culture -- "we're like a family here." Usually it's coming from a good place, wanting to emphasize the bond that employees have in a collaborative, productive work environment, but Jesse argues it's misleading and potentially harmful language that business leaders should avoid. Mark Butler CFO https://markbutler.com https://letsdothebooks.com You Need a Budget https://www.youneedabudget.com
Four Thousand Weeks: Mortality, Time, and the Paradox of Choice
January 14, 2022 07:00 - 39 minutes - 37.8 MBIf the title sounds like a philosophy paper... well, maybe it is. A philosophical discussion at least! Jesse has been reading Four Thousand Weeks: Time Management for Mortals by Oliver Burkeman, a book which poses some deep questions about human mortality and weighing what we choose to do against the seemingly infinite choice of things we could do. Four Thousand Weeks: Time Management for Mortals by Oliver Burkeman https://www.amazon.com/Four-Thousand-Weeks-Management-Mortals/dp/037...
Forecasting, Modeling, and Planning
December 24, 2021 07:00 - 28 minutes - 27.2 MBMark and Jesse discuss the value of forecasts, operational and financial models, and annual planning in general, as well as the pitfalls of putting too much faith into the numbers and not enough scrutiny into the assumptions. Mark Butler CFO https://markbutler.com You Need a Budget https://www.youneedabudget.com
Who Doesn't Need a Budget?
December 17, 2021 07:00 - 23 minutes - 22.8 MBMark and Jesse ponder a question -- is there anyone who doesn't need a budget? What about a person in the upper, upper crust, that has hundreds of millions or even billions to their name? Or what about someone who simply has very few desires, that are easily covered by their existing cash flow? The discussion quickly gets philosophical! Mark Butler CFO https://markbutler.com You Need a Budget https://www.youneedabudget.com
Luck, Success, and Increasing Your Surface Area
December 10, 2021 07:00 - 22 minutes - 22.1 MBWhether or not the successful admit it, luck plays a role in making things happen. Having the right at the right time, a chance meeting with the right person -- these factors could be called luck, and they matter in the world of business. But is that all there is to success? There's a saying that "luck is the residue of design," a nod to the influence of luck but also a reminder that without intelligent planning, execution, and effort, luck is wasted. Mark Butler CFO https://markbutl...
Creation Over Consumption: The Danger of Books and "Content"
December 03, 2021 07:00 - 37 minutes - 35.6 MBMark and Jesse discuss some of their favorite books... and some of their not-so-favorite books. They both love to read books, especially about business, but they also admit a danger in the practice. It's easy to confuse reading books, or blogs, or listening to podcasts, as an act of creation, as if doing so is actually improving or advancing your own business. Occasionally they may offer insight, but even that is not an act of creation for the business -- it's only useful if you use the info...
Desires and Tradeoffs: What Do You Want Your Business to "Do?"
November 26, 2021 07:00 - 23 minutes - 22.7 MBBusiness owners have a variety of reasons for starting and then continuing to operate their business. For many, it's to make money, or to make more money. Or, perhaps it's the security that comes with being your own boss. The desires that drive business owners can change and evolve, too. Some people endeavor to solve complex challenges, or to move the needle on a large industry or societal problem. Whatever the reason, Mark and Jesse argue that business owners need to be in touch with their ...
Three Lies Business Owners Tell Themselves About Cash
November 19, 2021 07:00 - 17 minutes - 17.2 MBThere's something about business spending that seems special, more important or impactful than personal spending or at least worthy of some exemption from normal budgeting practices. Maybe it's the large amount of money that typically flows through a business (large compared to the business owner's personal salary or distributions), or perhaps it's a believe that any ROI business spending generates is better than mere spending. Whatever the reason, business spending often gets less scrutiny ...
Saving for Big Ticket Purchases
November 12, 2021 07:00 - 18 minutes - 18.6 MBMark and Jesse answer a listener question: how do you pull the trigger on a big ticket purchase? When you've budgeted for a large purchase, and accumulated the cash, it's hard to see that cash flow out of your bank account. Mark and Jesse discuss the psychology behind large cash purchases, and how to manage your emotions as a business owner. Mark Butler CFO https://markbutler.com You Need a Budget https://www.youneedabudget.com
Transparency, Context, Profits, and Begging for Team Members
November 05, 2021 06:00 - 31 minutes - 30.6 MBMark Butler and Jesse Mecham discuss how much business owners should share about the company's financial position, and more importantly, why context for the information is vital to fostering trust and goodwill with employees.
Margin of Safety: The Key to Surviving and Thriving
October 29, 2021 06:00 - 45 minutes - 43.4 MBMark and Jesse discuss the concept of "margin of safety" in a business, that is, building in cash reserves to your operating plan for when things inevitably don't work out like you forecasted. Whether your business has to absorb unexpected costs, or revenue is down for a period, or some other "unknown unknown," having a margin of safety in your business ensures that you have the resources to survive the business cycles and thrive over the long term.
Starting vs Scaling a Business
October 22, 2021 06:00 - 18 minutes - 18.4 MBIt should be no surprise that a business with 100 employees has different management challenges than a business with 10 employees. At some point, managing the business becomes less about the idea that founded the business -- creating something that people like and want, product market fit, etc -- and more about solving the logistical challenges of scaling that business to grow. As Mark and Jesse discuss, those are two different skillsets, and few people excel at both. Understanding your stre...
Building a Referral Business
October 15, 2021 06:00 - 27 minutes - 26.7 MBThere's plenty of firms and consultants out there selling strategies and solutions for customer acquisition using partner programs, referral codes, and other internet based referral tools. They promise to be the "gasoline" that accelerates the fire of growth in your company, but do the results hold up to the promise? Is it possible instead to build a business where your main source of customers is simply referrals from other customers? Mark and Jesse discuss. Mark Butler CFO https://...
All Your Needs are Wants
October 08, 2021 06:00 - 20 minutes - 20.7 MBIt's easy enough to convince ourselves that personal wants are "needs" that we just have to have. In business, the temptation is even stronger -- after all, it can probably be expensed, there are plans for growth, we have to keep up with the competition... However you spin it, most "needs" are really just wants, and our cash is a scarce resource. Recognizing our wants, however, can free us from the feelings of FOMO, the stress, and the tunnel vision that often accompanies strong desires, and...
The Most Boring Episode Ever... and Maybe the Most Important: Process
October 01, 2021 18:00 - 43 minutes - 41.3 MBIt's a word that inspires yawns and sends meeting participants to their phones. But, it's something that strong leaders and strong teams do well -- process. Mark and Jesse discuss what it means to have good processes in your business, what they look like, and how to develop good processes. Process improvement doesn't happen overnight, in fact it often happens in tiny, incremental improvements over long periods of time. Learning to work on process as part of your normal business operations is...
Busting Tax Myths with Casey, Pt 2
September 24, 2021 06:00 - 59 minutes - 56 MBMark and Jesse chat with their long-time tax advisor Casey Murdock about the importance of tax strategizing throughout the year, what to look for in a good tax advisor, when it's appropriate for businesses to do their own taxes, and more! Casey Murdock https://www.wealthguardadvisors.com/team/casey-murdock
Busting Tax Myths with Casey, Pt 1
September 17, 2021 06:00 - 52 minutes - 49.3 MBMark and Jesse invite their long-time tax advisor Casey Murdock, or Wealth Guard Advisors, to talk about common myths and misunderstandings business owners have about the tax code as well as legitimate tax saving strategies. Tax can seem like a tedious field, but having good tax strategies can result in big savings. As always, having cash on hand opens up options for tax planning. Stay tuned next week for more tax myth busting with Casey! Casey Murdock https://www.wealthguardad...
Cruel Accruals: Understanding Accrual Accounting
September 10, 2021 06:00 - 44 minutes - 42 MBCash basis accounting works for a lot of businesses, and it has a lot of benefits being simple, easy to understand, and a relatively "pure" way to evaluate the cash position of the business. But for some businesses it may make sense to switch to accrual accounting, where things start to get a bit complicated. Mark and Jesse set out to demystify accrual accounting and break it down into YNAB-equivalent terms. Mark Butler CFO https://markbutler.com You Need a Budget https://www...
Core Values are Everything (But They're Not What You Think)
September 03, 2021 06:00 - 28 minutes - 27.9 MBMark and Jesse take a break from talking about cash to focus on the "softer" aspects of running a business and, more specifically, a team. But, as these things tend to do, it turns out core values are everything about running a business, and they directly impact how your day to day business operations proceed. While very important, core values can be hard to determine, because they are emergent, not aspirational. You simply have them, or you don't. You don't aspire to have integrity, y...
Tracking, Intending, Forecasting
August 27, 2021 06:00 - 27 minutes - 26.6 MBMark and Jesse discuss the role of forecasting in a business' budget, and why many businesses get stuck on "tracking" their finances, for tax purposes, rather than truly budgeting. Mark Butler CFO https://markbutler.com You Need a Budget https://www.youneedabudget.com
When Do You Pay Yourself?
August 20, 2021 06:00 - 36 minutes - 34.5 MBJesse and Mark answer the questions -- when do you start paying yourself from the business? How much? Should you take distributions or draw a salary? Mark Butler CFO https://markbutler.com You Need a Budget https://www.youneedabudget.com
When Is Enough... Enough?
August 13, 2021 06:00 - 44 minutes - 42.5 MBJesse and Mark ponder the question: when has business done enough? Enough revenue? Enough profit? When has the business owner taken enough in salary and distributions? The answer may lead you to some uncomfortable questions and answers. Mark Butler CFO https://markbutler.com You Need a Budget https://www.youneedabudget.com
Simplify Everything
August 06, 2021 06:00 - 37 minutes - 35.7 MBHow you manage your financial systems is an indicator of how well you manage the rest of your business, says Mark Butler. Long lists of bank accounts, complicated credit card payment schemes... as businesses grow their financial systems becomes more complex, but without careful management, it's easy to let become a jungle that accounting has to hack through every month to close the books. Simplifying these things leads to less stress, less hassle for your accounting team (and less cost), and...
Reconciliation: Way Cooler and More Critical Than You Think!
July 30, 2021 06:00 - 19 minutes - 19.6 MBIt a fussy word, and almost sounds archaic nowadays, like "balancing your checkbook." But reconciliation is critical to ensuring that your bank account actually lines up with the jobs you assigned to your dollars in Rule One! Basically, reconciliation is a process in which you compare your actual bank balance to your balance in YNAB. This serves two purposes. First, it ensures that you are entering expenses in YNAB correctly; mistakes happen, direct import occasionally throws an error,...
Rule Four: Age Your Money, Not Your Strategy
July 23, 2021 06:00 - 41 minutes - 39.2 MBJesse and Mark wrap up their review of the four YNAB rules as applied to business with Rule Four, age your money. This rule is a consequence of following the first three rules, and it refers to the fact that once you have embraced the rules you will find yourself paying for this month's expenses with last month's money. Maybe even money from two months ago. That's called aging your money, and it's crucial for being strategic in business. Mark Butler CFO https://markbutler.com Y...
Rule Three: Budget Is a Verb, Not a Noun
July 16, 2021 06:00 - 40 minutes - 38.9 MBMark and Jesse continue analyzing the problems of small business finance through the lens of You Need a Budget's "Four Rules." Today they explain that Rule Three -- roll with the punches -- is a call to actively, and continually, budget for the business. The budget is not a static document that gets set once a month, or once a quarter, or yearly, then measured against. Budgeting that way is a good way to feel continual frustration at not meeting numbers, because all budgeting involves ...
Rule Two: Dealing with "Fluke" Expenses
July 09, 2021 06:00 - 21 minutes - 21.6 MBMark and Jesse expand on Rule Two, or "embracing your true expenses." When Mark onboard a new client, he helps them import six to twelve months of prior expenses into YNAB for analysis. With these numbers, Mark and the client can get an idea of the true expenses of the business, including expenses that occur infrequently, whether it's annual insurance premiums or unexpected costs related to operations. Often during this process the business owner will point out how the expenses during the hi...
Rule Two: Sleep Better at Night by Embracing Your True Expenses
July 02, 2021 06:00 - 36 minutes - 35 MBMark and Jesse discuss how YNAB's Rule Two can help business owners sleep better at night, by setting aside money for their known (and some unknown) future expenses like taxes, insurance, future hiring, and more. No more sweating during tax season wondering what your tax bill will be and how you are going to pay for! Mark Butler -- the Virtual CFO https://markbutler.com You Need a Budget https://www.youneedabudget.com
Managing Your Emotions Around Money with Rule One
June 25, 2021 06:00 - 31 minutes - 30.7 MBMark and Jesse conclude their discussion of Rule One -- Give Every Dollar a Job -- for businesses by exploring how it can help anxious owners gain control over their emotions around money, cash flow, and what to do with the company's excess cash. Mark Butler CFO https://markbutler.com You Need a Budget https://www.youneedabudget.com
Rule One: Your Cash Is Your Strategy
June 18, 2021 06:00 - 44 minutes - 42.7 MBMark and Jesse continue their deep dive into YNAB's Rule One -- give every dollar a job -- as it applies to businesses. Jesse says "show me your outflows, and I'll show you your strategy." The things a business spends it's money on, is a proxy for the businesses strategy, just like the things individuals spend money on is a reflection of their values. Mark takes this idea a few steps further, insisting that all of a business' cash is wrapped up in it's strategy, or lack thereof. Inflow...
Rule One: Scarcity and Clarity - How Do You Play the Game?
June 11, 2021 06:00 - 55 minutes - 51.9 MBMark and Jesse discuss Rule One -- give every dollar a job -- for businesses, specifically around the concept of scarcity. There are only so many dollars available at any one time, and often not enough to do everything an entrepreneur wants to do. Mark argues that this scarcity is actually the entrepreneur's best friend, as it drives businesses to get creative about reaching their goals with the resources they have, rather than put themselves in financially precarious positions by borrowing ...
Your Business On a Budget
June 04, 2021 06:00 - 41 minutes - 39.1 MBJesse Mecham, founder of software budgeting service You Need a Budget (YNAB), and Mark Butler, a virtual CFO who helps a businesses of all sizes manage their finances, join together to talk about the money issues many small businesses face, and strategies for addressing them. Today, they apply YNAB's four rules of budgeting to the small business, starting with Rule #1: Give Every Dollar a Job. By giving every dollar a job, businesses can not only create reserves for unforeseen expenses...
Coming Soon: Budgeting for Your Small Business!
May 24, 2021 06:00 - 1 minute - 3.01 MBJesse Mecham and Mark Butler are launching a show all about small business finance. They will help you solve your cash flow problems, budget effectively, and increase your profits.