Episode Transcript
[00:00:00] Welcome to the Smart Credit experience, the place where financial clarity, strategy and transformation begin. I'm your host, Geri Toliver, CEO of Smart Credit Solutions and the creator of the Smart Credit method. Every week, I break down the truth about credit, funding and building a financially abundant life and business. So if you're ready to learn what lenders actually look for, how to build a fundable business, and how to move forward with confidence and clarity, you're in the right place.
[00:00:31] Have you ever noticed how some business owners are making millions of dollars, but somehow they're still stressed out and broke? And then you see other business owners that are making not even a fraction of that, but they're calm, they're not stressed out, they're paying themselves. They have money in the bank. And so what's the difference?
[00:00:52] Well, what I've learned is that it's not normally how much money they're making. What's different is how they think about the money that they're making. Because it's not about how much money you make, right? It's about how much money you keep. And I think that we have all been taught to believe that money solves all of your money problems, but I have learned that that's really not the case. You know, you may think, well, if I make this $10,000, things will be fine, or if I get approved for this funding, everything will be fixed. Or, or if I get a business loan or a credit card, I'm not going to have to stress out about money.
[00:01:31] But here's what I want to ask you.
[00:01:34] If you got $100,000 deposited into your business bank account today, what would happen to it for real?
[00:01:43] Not what you would hope would happen, but what would actually happen? Would every dollar have a purpose? Or what, would it slowly disappear over the next six months because you didn't really have a plan? And see, that's the conversation I want to have today. Because one thing that I have learned after working with tens of thousands of people with both credit and funding, is that the money habits that you have in your personal life, they are not going to disappear when you become an entrepreneur. They are legitimately going to follow you into your business.
[00:02:16] So if you avoid looking at your business personal bank account right now, guess what? You're going to avoid looking at your business finances and your numbers. If you spend emotionally in your personal life, you are going to bring that emotional spending into your business. If your paycheck that you get from your job somehow magically disappears, there is a very good chance that your business Revenue is going to disappear the exact same way.
[00:02:42] So don't think that just changing the name on your business bank account or any bank account is going to change your habits. And that's why I believe that every entrepreneur should give every dollar a job before you ever spend it, not, not after, you know, before.
[00:03:00] So what I want to do today is I want to give you a blueprint, a strategy, a roadmap, a plan that you can give for your money. I'm going to give you six jobs that I think that every dollar should have, whether in your personal life and in your business life. But today I'm going to focus a little bit more on the business because most people that are probably going to listen to this are small business owners, startups, entrepreneurs. And I want to give you that financial education that you need to really grow your business sustainably long term.
[00:03:36] So the first job that every single dollar should have is to keep your business alive. I mean, this might not sound exciting, but it's true. Nobody gets on Instagram or social media, period, talking about paying their insurance premiums. Nobody's talking about running payroll and have to paying, have to having to figure out how to meet payroll. They're not talking about renewing their QuickBook software.
[00:04:00] But these are the things that keep the business alive.
[00:04:04] And so your business has to survive before it can actually scale up. And I think that a lot of business owners, owners skip over this because they're too busy chasing after growth.
[00:04:17] And I get it. Growth is exciting. Stability can be a little, you know, boring. But lenders don't finance or fund exciting. They fund stability.
[00:04:30] That is what they say yes to. So before a dollar buys anything and you're chasing, while you're chasing that shiny object, ask yourself, does this help my business stay healthy? Does this biz, does this purchase expense help my business stay alive?
[00:04:50] Because sometimes the smartest thing that you can do is buy the things that aren't popular, buy the things that people don't always talk about or even notice because it's the things that are happening in the background that keep businesses alive and healthy.
[00:05:07] The second job your bit, your money needs to have is to help you make more money.
[00:05:11] Now, I think that sometimes this is where people get spending confused with investing, because not every expense is an investment, right? Like, think about it.
[00:05:26] How many times have you found yourself buying a course that you thought, okay, this is an investment in my business, but you didn't finish it.
[00:05:36] That's really not an investment.
[00:05:37] Or what about buying a CRM or software? Just because you saw somebody on YouTube recommend it, right? That's not really an investment.
[00:05:48] But, you know, spending money on something that consistently brings in customers, that is an investment.
[00:05:57] Because you have to really ask yourself, will this dollar that I spend bring me back more? That's the question. If I spend this dollar today, am I going to get more back? Now there's only a couple, a few different investments that you can make that can guarantee this. This is investments into marketing. Marketing can definitely do that. If you put money into advertising, if you put money into sponsoring, if you put money into getting your business out there so more people can be aware of it, you can get a return on that.
[00:06:31] Or what if you spend money or into training, into bettering your skill set?
[00:06:38] That can definitely be an investment. Or what about hiring better people? The right person can definitely help you bring in more money. So the goal isn't really to spend less. The goal is to spend your money more intentionally.
[00:06:53] Because if you don't have a plan for your money, guess what? Other companies, they have a plan for it. So make a plan for your money. And that plan should revolve around your money making more money.
[00:07:05] The third job that your bit that your money should have is to prepare. You know, to prepare for rainy days is the best way to describe it. Because whether you realize it or not, emergencies are going to happen. Things are going to go wrong. Whether you want to think about it or you don't want to think about it, it still is going to happen, period.
[00:07:26] So eventually you are going to have to pay the cost of what it costs to run a business.
[00:07:34] And these costs are when clients may pay you late, or sometimes if some of your equipment dies or maybe one of your biggest contracts fail through, or maybe you're slow, your sales slow down, you're having, you know, a slow season.
[00:07:52] Whatever the case is, some people feel like, oh, maybe I'm having bad luck. But that's not technically bad luck. It's just the cycles of business, you know, when you. I remember one time when I had some clients out in Atlanta hire me to help them with repairing their credit. This was when we were repairing credit. We don't do that anymore. We only educate people on the process so they can do it themselves successfully. But. But I remember when six people out of Atlanta friends hired us to help them with repairing their credit. They all paid us the money to repair it. We repaired their credit, we helped them raise their scores to qualify for what they wanted to qualify for. So they went out there, they bought houses, they bought Cars, they got approved for credit cards and loans. And then what did they do? They went to their banks, they told their banks that the charges were fraudulent and that they did not approve of these charges. And then every last one of those charges were debited from our business bank account.
[00:08:57] And I don't know if y' all know this, but when customers file chargebacks, your merchant will deduct those. Those charges from your bank account, plus they will charge you fees for every single chargeback. So when I tell you over $5,000 was just magically disappeared out of my bank account, and then on top of fees, it put my business bank account in the negative. And that was a situation that I wasn't prepared for as a startup business. Now, luckily, I had all my eyes dotted and my T's crossed. We have contracts, we have everything put into place so to protect us. And so we sent in that documentation, we got our money back, and it was able to put me in a better situation. But the problem was that my merchant, the payment processor that I was using, thought that we had a fraudulent business, thought that we were scamming people. So they shut down my merchant account, and we couldn't even accept payments because of this. And so here I am, six months trying to find another payment processor because of this crap. And it was just a situation that I just really wasn't prepared for. But I had good credit at the time.
[00:10:11] I had some credit to lean on, and it helped me survive that tough season. But imagine if I didn't. Imagine if I didn't have contracts in place. Imagine if I didn't have a way to protect my business and protect myself. That would have been a really bad situation to be in. And so you have to understand that even financially healthy businesses have problems. And so it's not.
[00:10:36] You shouldn't have to avoid them. You should expect them. But the difference between, you know, thinking like a consumer and thinking like a business owner is that consumers, they react to emergencies, but business owners prepare for them.
[00:10:53] So when something unexpected happens, you shouldn't have to wonder how you're going to survive. How am I going to survive this month? How am I going to survive this quarter?
[00:11:03] That's what reserves are for. That's what your credit is for so that it can help you weather some of those storms and still come out on top.
[00:11:13] All right, the fourth job that your monies should have is to pay yourself.
[00:11:20] Now, can we talk about this for a hot second? Because this one is so, so interesting that I see a lot of people that Treat their business bank account like their personal checking.
[00:11:35] Every single dollar that comes in, they're buying something, they're taking cash out, they're covering personal bills. And that's not how business owners operate.
[00:11:46] Okay, you, that's not how they operate. And then you have another set of business owners. Should I mention, these people don't pay themselves at all.
[00:11:55] They never pay themselves. They're making everybody else rich, they're paying everybody else, but they're not paying themselves a dime.
[00:12:04] And let me tell you something. Whether you're not paying yourself anything or you're paying yourself very minimal, you know, or you're just, you know, just taking money out the bank account, just spending it wherever, neither one of those behaviors is healthy.
[00:12:20] Neither one of those. And so your business should pay you, but it should pay you intentionally, not randomly, not emotionally. You shouldn't feel guilty when you pull out money out of your bank account.
[00:12:34] You should do this with a plan.
[00:12:36] Because if your business cannot pay the owner, that's a problem and that's something worth paying attention to. You're working too hard not to pay yourself something, and so you need to be paying yourself something so that you can reap the, the benefits, reap the rewards of your hard work. And that can even help you stay motivated to keep your business going. Because there's nothing more unmotivating than working incredibly hard to build your business and not be able to pay yourself something.
[00:13:08] Pay yourself something. But again, do it intentionally. I remember the first time that I paid myself, it was like, it was like heaven because I was working so hard and I thought that, okay, I have to wait until I make a certain amount of money, until I pay myself. And then, you know, I got with the right people and the right mentor and they taught me how to pay myself intentionally so that I could build wealth. Which is job number five, by the way. The fifth job that your money needs to have your dollar is to build wealth.
[00:13:48] Because a lot of business owners, they trap themselves, entrepreneurs trap themselves in the self employed role where you go from working for someone else to just working for yourself, where you know if you don't work, you don't get paid. And you basically have a glorified job.
[00:14:10] And granted you can work whenever you want to work, but if you don't work, you don't eat. And so your business is a vehicle to help you with building wealth. And so if you, if you're going to spend years building a business, you need to also be building wealth. And let me tell you something, I hear people Tell me they want to build wealth all the time. Every single time we get on meetings or consultations and I ask people what their biggest goal is when building their business. The number one thing that they say is they want to build wealth.
[00:14:41] But how can you build wealth when everything stays inside the business?
[00:14:47] The one bad year comes along and then suddenly everything that you build is at risk. That is not building wealth. Your business should be producing assets that improve your life.
[00:14:58] Maybe that's investing, maybe that's buying real estate. Maybe that's opening a retirement account.
[00:15:05] Did you know that your business can have a company sponsored 401k?
[00:15:10] My business does Smart Credit Solutions has a company sponsored 401k. I am an employee of my company.
[00:15:19] I contribute 7%, I'm sorry, 10% of my paycheck into my company sponsored 401k. And then my company matches it.
[00:15:30] Did you know that you can do that?
[00:15:32] You can. And that's a part of building wealth as a business owner.
[00:15:37] So you know, whether, whether if you're trying to invest, build real estate, whatever you're trying to do, this is something that you have to do. But I understand that it's also something that you have to learn. This is something that I had to learn. I had to learn that just because your business is generating revenue doesn't mean that it's building wealth.
[00:15:55] Just because your business has strong cash flow doesn't mean that it's building wealth. Just because your business is even bringing in a profit doesn't mean that it's building wealth.
[00:16:06] Until your business can intentionally turn something into another thing that continues to grow. Right.
[00:16:16] It's. It's not building wealth. Your business should be creating assets that pay you passively. That is building wealth. And your business can be a vehicle to that. But it's hard. Your business isn't going to be able to do that if you're spending emotionally, if you don't have a plan for every single dollar and if you're not intentional about where your money is going.
[00:16:42] And this actually brings me to job number six, which is to reduce debt.
[00:16:48] Now some people are like, Jerry, what are you talking about? You're the one telling me to get into debt. I understand that. I'm in the funding business, right? I'm not anti debt at. Not at all. I teach people how to get access to capital.
[00:17:00] See, the goal isn't to avoid debt. The goal is to make sure that your debt is working for you. Instead of stressing you out and controlling you debt should help you create new opportunities for Yourself not create anxiety. And most people get incredibly anxious when the topic around debt or capital or funding arises because they don't have a plan.
[00:17:24] Every dollar should have a plan, because when you have a plan, it's going to reduce unnecessary anxiety. It's going to reduce the fear of not being able to pay it back. It's going to reduce the fear of having unnecessary obligations.
[00:17:39] So the more money that you have tied up in yesterday's decisions and or yesterday's mistakes, the less freedom you have to build today and tomorrow.
[00:17:52] The reality of it is we only have today.
[00:17:55] And so if you really, truly want to succeed, you can't be racking up a whole lot of bad debt. If you want to have freedom, you've got to use capital to your advantage to build more money, because that's what you're after, right? You're after freedom. And so when I look at financially successful business owners, I don't see people that have never borrowed money.
[00:18:20] I see people who knew exactly why they borrowed it, exactly what it's supposed to accomplish, and exactly what they're going to do to pay it back.
[00:18:32] That's the difference. That's the difference between the mindset and. So here's what I want you to do today, okay? I want you to pull your bank statements for last month, your business bank statements for last month. And I don't want you to pull it with any type of feeling of guilt or judgment. I just want you to look at it. Just look at it. And then I want you to ask yourself, can I explain what every dollar is supposed to do?
[00:18:58] Did every single dollar have a job or was I making financial decisions just as I went? Did I just spend as. As I. As I go? Because if you're really trying to become fundable, if you're really trying to get capital, this is what really matters.
[00:19:15] Banks are evaluating whether your business is going to not only make money, but how to manage it. That's what they really care about.
[00:19:24] And honestly, I feel like that's something that we all should want to get better at anyway. Because, I mean, the overall goal, although it is to get access to funding, the real goal is more so about becoming the business owner who knows exactly what to do once the money hit your bank account.
[00:19:43] That's what it's really all about. It's about becoming a financially literate business owner.
[00:19:49] And so those are going to be the six jobs, y'. All. We're going to recap that real quick. So the first job was to make sure that your business is Keeping well the money is keeping your business alive. The second job is to make sure that your money is making you more money. The third is to help you prepare for the emergencies.
[00:20:10] The fourth is to pay yourself a reasonable salary. The fifth is to build wealth. And the six is to reduce your debt load.
[00:20:19] And so I just want to say thank y' all for spending some time with me today. And if you felt like you got something, value some valuable gems that I share with another business owner that you feel really needs to hear it. And if you're ready to build a business that's truly fundable, I want you to join us for our first Steps to Fundable workshop. It's going to be this upcoming Wednesday at 7, 7pm Central, 8pm Eastern. And we're going to give you the blueprint for funding your business the right way. If you don't know where to go, you don't know what where to get funded, you don't know what to say. And if you don't know how to get lenders to really compete with each other to confidently lend you money, then you should be there. We've had plenty of people that have graduated out of that workshop and have had wonderful success with funding their business and we'd love to see you there too. And if you want to talk to somebody one on one, you want to get a little one on one guidance, head over to smartcreditcoach.com and click on get help so that you can get match with one of our certified smart credit consultants. These professionals are highly equipped to help you guide you through the steps of getting funding the right way.
[00:21:26] And if you want to join us at first steps of fundable, you can join us at smartcreditcoach.com FSTF that's smartcreditcoach.com F S T F because the way we see it, getting the money is half the journey. We want to make sure that you know what to do once you get in, once you get it. But other than that, thank you for joining me today. Again, my name is Jerry over here at Smart Credit Coach and I'll see y' all next time.
