EP8: Accounting for Entrepreneurs with Dan Nicholson

ProfitLayer with Timothy Dick - Business building explored layer by layer.

“People want to build a balanced life. But you have to deconstruct what that means when you have a business.” - Dan Nicholson (17:05-17:14)Timothy Dick

Profit Layer

Having the right financial processes in your business is critical to your success. Failing to manage your money impacts your ability to market your business or deliver your services in a way that builds credibility and client loyalty.

Dan Nicholson helps entrepreneurs get clear on their financial goals while helping them optimize the strategies they use to grow their businesses. Dan’s work has taken him to the intersection where money, wisdom, health, and human capital meet. This broader approach to money management is rooted in the idea that money can’t be separated from the other things that contribute to your quality of life.

“Making a profit isn’t necessarily an end goal. At the end of the day, you have to do something with that profit.” - Timothy Dick (15:33-15:41)Most people put all of their time, energy, and attention into just one area of their life. Entrepreneurs typically focus on revenue goals without first identifying the driving force behind those goals. In most cases, they spend much of their time wondering if they’re going to be financially okay in the long run. By exploring the “why” behind their revenue goals, they find that their motivation actually comes from something bigger. That could be more time for themselves and with their families, creating a legacy, or supporting loved ones.

When you look at profit as the end goal of your business, it’s easy to forget that ultimately you have to do something with the profit you make. Business owners realize that the game they’re playing is much bigger than they once thought. But they haven’t deconstructed what it means to live the life they want.

Getting Clear on Your Profit PriorityYour financial processes will depend on your priorities. How much money do you really need to live the life you want? When do you need to reach that goal? These and other questions help you begin exploring what really matters. You can begin to create timelines for your goals and better determine where your money should be going.

Chasing attention, fame, and other vanity metrics causes entrepreneurs to lose sight of what’s important. They start comparing themselves to others. They achieve a goal only to reposition the goal post and try to achieve more without defining what it is they really want. Instead, consider your own unique situation and establish what your priorities are.

“The essential question everyone is asking themselves is, ‘Am I going to be okay, maintain the lifestyle I want, and achieve my goals?’” - Dan Nicholson (11:41-11:55)When you identify your true financial goals, you begin to get clear on the priorities and identify any financial issues that could be impacting your ability to achieve lasting success. Business owners can keep more of what they make just by optimizing the system they use and improving their cash flow. They can look at their taxes and asset utilization to reallocate money towards their bigger goals.

Get Guidance for Your Financial Decisions

When you manage your own financial operations, you can determine if you’re going to be okay in the long run, but you still need a partner to hold you accountable. Without ongoing support, most business owners spend their savings. The more they make, the more they’re likely to spend. Having someone alongside you who understands how you do business is essential to reaching your financial goals.

Most business owners resist tax accounting. But you need to make sure you have the right business entity in place to meet your goals. Avoiding your financial wellbeing can get in the way of your ability to take action. Becoming revenue-focused helps you understand how much money you need to cover costs and meet your financial goals.

When you’re clear about why you have your business, it becomes possible to be intentional in everything you do. Optimizing your financial systems gives the structure needed to put your goals into motion. The goals of your business are bigger than profit. When you align your actions with the purpose of your business, you position yourself to achieve new levels of success.

How to get involvedIf you would like more information about Timothy Dick, and the success businesses have gained through working with him, please visit his website. If you liked this episode, be sure to subscribe and leave a quick review on iTunes. It would mean the world to hear your feedback and we’d love for you to help us spread the word!

Learn more about Dan and his work by visiting his website at nthdegreecpas.com.