SPEAKER_00 0:00

Most product-based business owners think they need something new to grow: a new strategy, a shiny tool, a game-changing idea. But the truth, you don't need more exciting. You need what actually works. Because the businesses that win on profit and cash flow, yeah, they've mastered the fundamentals. And this is exactly what we do inside the Inventory Genius program. We clean up your financials so that you have a clear, accurate picture of your inventory and your real margins. We fix your product mix, making sure every single SKU is actually making you money, not just creating revenue. And we build a profit plan so that you can pay off debt, generate cash, and run your business with confidence. No fluff, no guesswork, no chasing trends, just a proven system that helps product-based businesses win again when it comes to profit and it comes to cash. Because long-term success isn't flashy, it's consistent. Join us in the Inventory Genius program. Let's make your business work for you. Hey friend, welcome to the Inventory Genius podcast, where we work together here to make you an inventory genius. We talk about profit, we talk about cash flow, and we definitely talk about your paycheck. Because at the end of the day, it's all related to your inventory. Let's go.

SPEAKER_03 1:30

If you've ever had a month where you find yourself asking, is it worth it? Am I ever going to get to the point where I make an income that is aligned with all this work that I'm doing? Is it ever going to match my income and the work? Am I ever going to get to a place where I stop worrying about cash flow every month? If you've ever said these things to yourself, if you're feeling this way, I want you to come and listen to this episode. Today I'm talking to my good friend. She's a profit expert. Her name is Sierra Stockland, and we're talking about the most common money mistakes that we see and that we've done. These are things that keep people like us financially stuck. And so together we're sharing what they are and what you need to do to fix it. I want you to come and listen. It's actually going to be a money talk that's fun. I'll see you on the inside. Yeah, I'm.

SPEAKER_00 2:46

I thought you were gonna say, should we tell them the money mistakes we made first and then start?

SPEAKER_03 2:52

Oh, oh, well, they might be crying.

SPEAKER_00 2:54

I know. So maybe we should just say who we are and what we do instead. Oh my goodness. First, you first. Okay, so my name is Sierra, and I, you know, I've been in the inventory side of business now since 2006. So 20 years. Ah, started a first retail store, then opened another store, franchised it. I have um built and sold a subscription box. So been around in inventory a lot, and I work with inventory or product-based businesses on creating profitability in their business. So I would say using their inventory to create more profit and keep more cash. That's what I do every day.

SPEAKER_03 3:30

And that is so needed. So needed. And I'm so glad I met you. A client of mine actually connected me with you. So uh I'm Susan Bradley. I am the founder of the Social Sales Girls, and we have a super similar history. So my first business was also a product-based business. It was a brick and mortar and manufacturing. I had it for 20 years. I made every financial mistake possible, for sure. Um, I felt really lucky that I was able to sell it. And a few years later, I purchased uh an e-commerce business that I had no business buying because I didn't do it, thought I knew. It took me a couple of years how to learn um how to sell physical products online. But the good news is I it took long, but I got really good at it. And so now in within our membership, I and our coaches help e-commerce store owners grow a business that pays them well. And that's why I'm so glad I love talking to you because the inventory thing is hard. Yes, and the project thing is hard.

SPEAKER_00 4:38

It is, yes. And I think, you know, every well, here's maybe the first thing that they do wrong with their money, which is I what I did wrong with my money, or when it came to numbers, you know, every business owner that I've met, I mean, there might be others out there that, you know, have a different story, but every product-based business owner I met is really good at their craft. So they're good at sourcing product, or they're good at making product, or they're good at selling and merchandising product, but numbers don't come naturally. And so because of that, they ignore them. And I think we hear this all the time. Know your numbers. Like they say it on Shark Tick, know your numbers, know your numbers. Okay, what does that mean? Like, what really what does that mean? Right. And so we're like, I don't even know what that means. So I'm just gonna go back to making things and selling things. So I know that I did this like with my retail stores. I was great at merchandising, really good at product assortment, and I was really good at selling. And then I guess the money came and the money went, and it was like, well, I hope more money comes than goes, you know, and that's kind of how I ran my business.

SPEAKER_03 5:40

Yeah, I'm a kind of a similar what well, you and I know. I think we've had some tears in a hot tub about it. Yeah. I was kind of the same thing. I was I I was really good at selling stuff and growing my business and and those vanity numbers. And um, and then I would still stomp around and say things like, Well, everybody gets paid but me here. Like, what the heck is going on? And think that the answer was go do more of what I had been doing, just go sell more. And yeah, that's a huge money mistake, hiding from you numbers. The other funny little story um that I think is quite interesting is that I've I'm always thought I wasn't good at numbers. I failed 11th grade math because I sat in the park, which is the same as what people do when they go make more products. Oh, yeah, it's true. Yep. Sat in the park. And and I said to some friends recently, oh, I really didn't get good at numbers. Like I'm only good at numbers if there's a dollar sign in front of it, which kind of made me sound like an idiot. But what I really meant was I only got good at numbers when I understood the why and what I was looking at. And that's not easy to find online, but you teach it really well.

SPEAKER_00 7:01

Yeah, I think it's, you know, if we break down the know your numbers, like what does that mean? Um, it means that when you make a sale, you understand what the sale costs you. Yeah, it means that if you hire someone, you expect a return on that investment. It means like, and those are things that entrepreneurs can do. It's a math problem. We can all do addition and subtraction. You know, it's it's actually not complicated. This is not algebra. This is addition subtraction. At the end of the day, when you subtract numbers from other numbers, we want a positive one at the bottom. And if it's not positive, how do we back into it? And so I think it's first just demystifying what that actually means and saying, you know what? I actually do know how to do math. Uh, we were just doing a live event for my mastermind last week in Nashville. And we did hot seats at the end. And one of my clients came up. She's been a client since 2024. Um, and she's made so many great decisions and hard decisions, like she's just been working on her business. And she came up and asked a question. And she said, so she's been with me since 2024. She said, I just am not great with my with math or my numbers, however she said it. And I got a little feisty and I said, You and all of you in here have to stop saying that.

unknown 8:18

Yeah.

SPEAKER_00 8:19

Because I think that's the biggest thing with entrepreneurs. We like to hide behind that statement because it it like absolves us from doing the work. Well, I'm just not good at it. Okay, well, if you're a business owner, you better figure it out. And so I got kind of got on her case. I'm like, you need to stop. Because the longer you say that, the more that you will live like that and build your business like that. So yeah.

SPEAKER_03 8:41

Listen, we could put you in a hot tub with us, and you could hear the consequences of that what happens if you continue that behavior. So yeah. Interesting, huh? That mindset and that excuse that I'm just not good with numbers. But I think I think that like I am really not good with algebra or um complicated concepts that I'm abstract, yeah, yeah, that I can't walk my way through. And even still now, like I I can work a P ⁇ L like nobody's business. But even still now, I will struggle with uh the balance sheet, which is you know, the the negatives, like that I'm not gonna do what and so so what I know is that anybody that can function in the world just needs a little bit of help. They just need to know what numbers, like what's important and what's not important, and what's what's something they can change and what's something they can't change.

SPEAKER_00 9:47

Yeah. Right. Well, and so here was an interesting way we ended that conversation, lest any of you think I'm just a meanie. I do love my people. But I said, so here's what we say instead. I'm not good at the numbers yet. I don't understand my financials yet. Because if you put the yet on the end, you take ownership that I will figure it out. I will hire help, I'll take a course, I'll do some research, maybe I'll even look at Google, right? Like there's a lot of options for us if we truly want to fix a problem. And so I think saying that, you know, not yet, opens it up to okay, so how do I get to the other side of yet?

SPEAKER_03 10:27

Yeah, that's so smart. That's a really good mindset shift. It is. One word. One word yet. And you know what I would say the biggest barrier is for people uh to get there is time, but they never they never prioritize it enough to find the time to really put the focus on it. Would you agree that usually by the time you do, there's a problem. Like what I'm sure lots of times when people come to you, it's not because they just woke up one day and said, Oh, I think I gotta see if Sierra can help me manage my inventory because I got nothing else to do.

SPEAKER_00 11:06

No, it's when we get to too much pain. But you know, as in your story and mine, you don't want to wait too long where you get over the threshold of like there's no turning back. So, you know, I had a lot of pain where, and by pain I mean everyone else is taking a paycheck and I'm not. I can't pay my bills this weekend. I need to take more money on and borrow more money. Like, that's pain, right? It's uncomfortable. But I would just kick it down the road. It wasn't for lack of interest, I just didn't really know what I should be looking at. And so the solution was just sell more stuff, you know. But then that would just create more problems, which you talk about that a lot. The problems just follow. Um, and so yeah, I think it's just a matter of like you have to decide that you're not willing to go through the pain or have the pain anymore, but do it before there's no turning back because I lost my business.

SPEAKER_03 11:56

Yeah. And so I I'm sure if I kept going, there would have been a point where I did too. I didn't lose it, but I sold it for so much less than I could have sold it for if I was financially responsible.

SPEAKER_01 12:09

Yeah.

SPEAKER_03 12:09

Right. The get-go, you know, and and so if both of us, like I think we are so um aligned with this that both of us are on a mission to make sure that that doesn't happen to other people like us.

SPEAKER_00 12:23

Yeah. And can I just be super transparent with everyone listening? Because I think they probably think, you know, well, that's you, that was 20 years ago, all the things. This is a recalibration that has to occur consistently. Like, I'm literally, I know you and I are gonna be chatting and having some fun, girlfriend time in a week or so. And I'm gonna tell you all the details behind the scenes. But like I just went through another month of this doesn't feel right. Then the math is not mathing, it's not aligning. But now I know how to feel that and see it right away and deal with it right away. So, and you learn that by learning a process, trusting the process, learning the process, right? So in the past, I could feel this twinge of like something's not right, but then kick it down the road, sell more stuff. Now a year goes by, 10 years, 15 years. Now I'm like, nope, I don't want to live. Nope, something's not mathing correctly. Like I'm recalibrating, I'm gonna make hard decisions, I'm gonna cut costs, I'm gonna, and so I just went through this again. So it's not that once you arrived, you're all you've always arrived, you know? No, you have to keep looking at your numbers and being honest with yourself and fixing things.

SPEAKER_03 13:34

Yeah. Yeah. Yeah. Let's talk about that for a minute because we want people to um say, well, those two um chatted about money, but I don't know what they're talking about. So let's talk about what the signs are. Like for me, when I think about what the signs were for me back in the day, it would be that I could sell a million dollars and not have the money to pay my income tax. Or I could sell a million dollars and yet um my line of credit was maxed at the bank and it was maxed at the beginning of the year. Like I never got rid of my line of credit. Or it could be like I'm paying like stupid amounts of money on my uh credit card interest because I can never pay off my credit card bill, even though my sales are growing. Yeah. That that to me, that was a big sign. Are there other signs? Like other signs that you see because you're eating a lot more of this than I do, I think.

SPEAKER_00 14:32

Yeah, so I think a couple things. Let's see if I can remember them at this age in my life. I lose my train of thought a lot. So a couple things. First, learning to identify those in small increments. So, like I was like that too. I can never pay my line of credit down, I can't get ahead of my credit card. I just talked to someone recently on a consult call, and she said, I've always been able to pay my line of credit down December 31st. I go into the year with I couldn't this year. Okay. So we fix that then. Like we instead of saying, Oh, it was a bad Christmas, it was a bad year, I can construction, whatever, and now we're two years down the road, it's been max for two years. We need to take a look at that in January. So it's like, it's like learning how to be real with that feeling or that inclination or an actual data point. Like this is not normal, and I'm not gonna just excuse it away. I'm gonna deal with it right now. So that's one thing. I think some other signs would be or things to think about would be really scattered time or holding on to really bad employees. So I've done a couple podcasts about this. One about time, time management and money management go together. So if your time is out of control, you probably have money, there's money issues because you can't have a calm life in a calm schedule when you're frantically selling and emotionally buying. You can't. So when you're feeling that agitation, which was part of my agitation last month, I was like, I feel agitated, something's not settling. It doesn't, it wasn't just the math. It was like you need to learn to trust that gut and deal with it right away. And then the other thing I think is people. So you I'm sure you've talked to you talk to owners all the time, right? I have this employee, she has a horrible attitude, but she's my best salesperson, so I can't let her go because I need to pay my bills, so I got to keep making sales. When you find yourself holding on to people or letting your employees run the show, even though you don't want to, that's probably a money issue at its root.

SPEAKER_03 16:35

It's a money issue because you're afraid that you'll lose something if you lose the person.

SPEAKER_00 16:41

Yeah, you're being held hostage because you need the revenue, most likely.

SPEAKER_03 16:46

Than the bad attitude or the poor work ethic or whatever. Oh man, I think we all do that.

SPEAKER_00 16:53

Yeah. And this is why it's like, yeah, I have to recalibrate and think about that too. Like, yes, this is gonna be uncomfortable, but yeah, do I want to be profitable? Does it make, you know, and deal with it right away.

unknown 17:05

Yeah.

SPEAKER_03 17:06

So when I think about dealing with it right away, listen up, you people who think you're really busy. Your business isn't gonna stop because you have to look after that. But but what it's okay to do, and I know Sierra agrees with me 100%, is you have to find the time and the attention. You cannot squeeze this fix in with the five million other fixes. You cannot say, yes, I'm just gonna add this one more thing to my plate because you will be garbage at it. Yeah. You really have to like finding out why you have this problem. Like, I I couldn't pay my line of credit off this year. I had more than one year, I couldn't do it, let me tell you. Finding out why might take you all the way back to to pricing, right? It might take or not um like or or costing or treating your bank account like an ATM. Like you, it could be all sorts of things, but you're gonna need to gather up some information. Would you? I mean, that's what you do with your clients. Yeah.

SPEAKER_00 18:06

Yeah, it's like a puzzle, you know. I've talked about this before. Like you throw all the puzzle pieces and then you have to start to turn them over. Okay, what where are all the blue pieces? Where are all the green pieces? You make up the piles, you find the straight edges in the corner, you just you sort through the numbers, which are just puzzle pieces, and figure out the picture that you're trying to create. Where do those pieces fit? And yeah, that takes time. Like you can't sit down and do a 2,000-piece puzzle in 15 minutes. It takes time. You think about it, you leave the table, you come back, you're stressed out, you leave the table, you come back again. You can't find the piece. I mean, that's yeah, like that's your that's what we do with our or what we should be doing with our numbers too. And then I think if you put um, maybe this is the second people thing people don't do right with their numbers, which I didn't do this, is um putting KPIs like tracking and measuring in place. So it was like, okay, if I sell more stuff, sell more stuff. What does that mean? Like, what's I know for my first store, this will date me 2006, little boutique in Fargo. My goal was to do $2,500 a week. So I wanted to do $10,000 months. Yep. And I had no idea what went into that $2,500. Like I get $2,500. $2,500. No, you don't like half of that. You know, I had a 50% margin or lower. So half went to my product, and then, you know, so then I couldn't figure out while I was always behind going into the next week because I made my goal, but the goal was like so arbitrary. Like, you know. So yeah, like measuring, tracking when am I off track? If I didn't make my 2500 goal, that means next week I got to do 3500. Like it doesn't just reset, like you know, so those kinds of things.

SPEAKER_03 19:42

Yeah. And the other thing, here's what I see too. The other thing is a lot of our people are good at selling. Like a lot of them are good. And so I think about this actually happened with a client, but but I think about um, if you do, if you're doing say $50,000 worth of sales, so let's say in a year. So let's say it's somebody just starting out, you do $50,000 worth of sales and you've set a goal to do $100,000 and you've got a way to make that goal, and you want to sustain it, and you cannot understand for the life of you, because everything should be better when you do $100,000, why you have no money. And it's because you haven't realized that if you double your sales goal many times, unless you're very strategic about how you get there, you're gonna double the cost of your inventory. You're gonna you have to make an investment to have more inventory so that you can ship out those orders. And I see people missing that all the time.

SPEAKER_00 20:43

Yeah, and you talk about with you know, teaching ads and e-commerce sales, you also double the cost of those sales unless you're strategic. Like you can grow a business without doubling the cost of the sales. Like you can, and you and that's something you should figure out with your puzzle, right? Because there's thresholds too. Like you could say, okay, I'm $100,000 a year right now. I know because I understand my numbers, I know my operational costs will not increase until I make $250,000. So I can build up to $250,000, actually have more profitability. But when I hit the $250 mark, my operational costs are gonna increase, meaning now I'm gonna need two more people, another machine, and a bigger space, so more rent or whatever. People don't think about that. Oh, yeah.

SPEAKER_03 21:27

They think about how much fun it will be or how exciting it is.

SPEAKER_00 21:32

Yeah, I have a seven-figure business. Yay! I did too. And seven-figure problems to go and a seven-figure sleep, sleep every night to go right or lack of it. Yeah.

SPEAKER_03 21:43

Yeah. And so I I would say, you know, I I would want people to understand that because some some people, many people will think, well, there's no way to control that. But there is actually. And I wish I knew this 20 years ago. But when you want to grow your sales, pick one way, pick one huge. Product or one subscription or one thing and use that as your vehicle to scale.

SPEAKER_01 22:06

Yeah.

SPEAKER_03 22:07

Because you can you will turn it over multiple times because the biggest you know issue with inventory-based businesses is they can't turn it over fast enough to actually realize that profit. Like, okay, you have a 50% margin on that stuff, but actually, Sunshine, you don't have it until you sell it. Like it took me 20 years to learn that. Yes, and you have cash tied up in stuff. Yes. And so choose one thing to scale. Don't scale the whole thing because then you're just building your inventory. Scale one thing so that you can turn it instead of if your average inventory sells out three times in a whole year, pick that product that you can sell out 15 times in a whole year. Yes.

SPEAKER_00 22:53

Yes. Yeah, people don't look at turn. I learned turn. I did still have my retail business. Um, and I will say that when I built my subscription business, lest you think that I just went from failure to coaching people. Um there was an iteration in between. Um, when I built my subscription business, I'm like, I'm gonna build this profitably. And I did build it profitably. I took a paycheck, all the things, which is how I learned what I'm teaching with inventory genius. But in my retail business, the one thing I did measure, I don't know why I had heard about it, but was turn. I was very intrigued by that. I just didn't know how turn also like how you had to measure margin and turn together. So I was missing some of the pieces, but turn, I was interested in that because I was like, that's so interesting. If I can buy something for a dollar and make some of my stuff can turn into $4 once a month, some of it turns into $4 twice a year. Well, I want to be buying the things that turn into $4 once a month, right? So that's but a lot of um product-based business business owners don't know about turn or think about it. It's huge. No, they don't.

SPEAKER_03 23:52

Yeah, they just think what else actually, what they mostly think, and uh and this is so non-judgmental because we've made all these mistakes is well, I'll just get another thing, I'll just add a new product, and then you have all the cost of getting that product, getting it shipped to you, getting it listed, um, maybe creating an ad with it. And so it's like an expensive sale. And what you really need is a cheaper sale. We're actually this year for the first time ever in our reliable revenue program, we are tracking the cost to acquire a customer.

SPEAKER_00 24:27

Yeah. I won't even tell you my cost to acquire a customer. It's just tough out there, and if you're not measuring that, oh it's big deal.

SPEAKER_03 24:38

Yeah, yeah. So I I think that um, you know, it's all very convoluted. I think that if you feel overwhelmed and you have a money problem, the the best answer is to set aside the time and get help and be okay with like just keeping everything status quo in your business, just keep the balls in the air.

SPEAKER_00 24:56

Yeah.

SPEAKER_03 24:57

You don't have to grow, you don't have to set the world on fire.

SPEAKER_00 25:00

That's great. They don't have to grow. You don't have to grow. You can actually slow down, and that's okay.

SPEAKER_03 25:06

Yeah, yeah. Even if you have to lose a helper, you know, somebody on your payroll for a period of time until you get your financial house in order, I think that that's really important. And so if you if you take the time to do it and you need help, it's the best investment you'll ever make because it will set you up for years of profitability down the road.

SPEAKER_01 25:30

Yeah, for sure.

SPEAKER_03 25:33

Can we talk about something else that I see all the time?

SPEAKER_01 25:36

Yes.

SPEAKER_03 25:38

Because you'll you'll understand this. Um, so what I see a lot of the time is people telling me that what their margin is, like when they look at their PL, if you know, I'm usually excited if they have one. Yeah. And and they look at it and they'll tell me what their gross margin is, and they'll tell me when they price their products what their margin is. So somebody will tell me, oh, my gross margin is 60%. And so for those of you who are listening, that's like if something is selling for $10, they're supposedly making $6 on that item. And they, I think we're taught in our industry to think about it in percentages. But one of the things that I see time and time again is that even though they have a good percentage, gross margin, their prices are so low that the dollar amount is not having the impact it needs to on their expenses. So say it costs them $2,000 a month to run their store, and they're selling products for $19.97, and their margin is, you know, say it's 50%. So $9.97 on every order, it's just not enough to make that $2,000 and some and some profit. Like I see that all the time. Do you see that too? That they they run in the percentage and they don't actually look at the dollars that like this thing that I just am paying to promote and list. I'm only ever the best case scenario is I'm going to make six bucks on it. Should I even be trying to sell that thing or should I be saying it doesn't make the cut?

SPEAKER_00 27:18

Yeah, I think it's that I see that. And I tell people it's either like really a margin play or a volume play. You have to figure out what type of business model you are. Because if you're volume, you could have maybe a less landed margin, but you have to do a lot of volume. So that's why I always say you have to start by creating profit goals, not sales goals. Because you have to work from the bottom up. Like, what is profitability? Then how much does it cost to run my business? Okay, so then how much margin do I need to cover that and drive profitability? So then how much do I actually have to sell? And don't you feel like people flip it? They're always like, How much do I sell? I have six-figure business, six-figure business selling 999 widget widgets, but I have a massive warehouse and all these people. So that six-figure business isn't gonna cut it, even though maybe my margin looks good, right? Yeah, yeah. And and if you ask someone what the goal is, it's almost always a sales goal. It's all I've never heard someone say, Oh, my goal is to be 20% net profit by the end of the year. Ever or hear something else. I don't, I would be curious if you hear this. People will say, even professionals in our education space, I hear them saying this, which is interesting. They're like, oh, I'm at a 50% profit. They're looking at margin, they're not looking at net profit. Do you hear that? I'm like, oh whoa, we've got a lot of math to do before you're at profit, right? All the time, but it's not their fault.

SPEAKER_03 28:43

It's like there's no, there's like half the time you'll go to a CPA and they don't even understand how to do accounting for product-based businesses.

SPEAKER_02 28:52

Yeah, they're telling me you got a 50% profit margin.

SPEAKER_00 28:56

Yeah. I mean, I uh that's what I thought. Like, I remember talking to someone who finally helped me understand the numbers. He explained it in a way that I could understand it. It wasn't scientific or doctor language, you know. And he this is how he explained it. He's like, Sierra, just because you buy something for five and sell it for 10 does not mean you made five dollars. I was like, What? He's like, no, he goes, It cost two dollars to open the doors this morning, it cost three dollars for insurance, it costs a dollar for to package the product, whatever. He's like, You're actually losing money on a you bought it for five, sold it for ten. In fact, you might lose money on a buy it for five, sell it for fifteen. And I was like, Whoa, that was a big deal.

SPEAKER_03 29:37

Yeah, and and sometimes it's just somebody shining a light on that. It's not that you're stupid or you miss something, it's it's that like why should you be good at it, actually?

SPEAKER_01 29:48

Yeah.

SPEAKER_03 29:49

It's another thing, it's just a problem to solve for sure. I I yeah, I see that all the time.

SPEAKER_00 29:57

The other thing that margin with the margin conversation is a lot of people don't understand that markup is not margin.

SPEAKER_02 30:04

Yeah.

SPEAKER_00 30:05

So they'll say, well, I mark it up three times. You probably hear the three times markup, and they're super proud of it, which I was too. So again, not you know, I have done all these things. Three times markup, that's great. But that's not your margin. Like your margin is at the end of the day, right? So you buy, I always give it an illustration, you buy a six-pack of shirts, right? So six shirts, you sell three of them with a three markup. One of them is damaged, you throw it away, two of them are extra smalls. You can never sell them, so you mark them down to five dollars. So your margin that month or that week or that day is actually not 60%. It could be 42%, which you can't survive on.

SPEAKER_03 30:41

Yeah, so so true. You know what I did when I was, I never did anything that smart in my first business. I I don't know, like I was really good at selling stuff, the bottom line. Talked a good game. And and you know, and good with people, like got the fact, but but I never did this in the whole 20 years of my business. And one of the things I did when I um when I bought Wee Squeak was well, actually, there's two things. So the first thing I did was I decided, and we'll talk about this in a minute because I'm sure you see this all the time, is that even if it were a teeny tiny amount, I was getting on the payroll. Because, you know, I hadn't, you know, I was very sporadic about how I paid myself before. But the second thing I did is I decided I was gonna figure out what it costs. I called it the cost, what does it cost me to wake up every day?

SPEAKER_01 31:34

Ooh, that's a good way to say that.

SPEAKER_03 31:36

And what I meant was like, what is my payroll? What are all my Shopify expenses? What are all the things that I have to pay, whether I sell one thing or 10 things? Yeah, like what does that cost every day? And and when I knew that number, and I do this with our mastermind group too, I tell them, like, you gotta figure out what it costs you to wake up every day because you're not gonna be profitable by cutting expenses. You cannot cut your expenses to profit. You gotta know what it costs you, and then go out and figure out how to be profitable. And like it's for many higher volume stores, it's it could be a thousand bucks or eight hundred bucks to wake up every day. Yeah. And most people don't know that, they just look at their PL, see their lump of expenses, and and don't ever go, oh, I should divide that by 30. Yeah. So that's simple math. It's super simple math. Yeah. Yeah. So that. And then the other thing was the the um the pay myself. When I get to, I hear this all the time. When I get to um, I just had this conversation with someone this week. I don't pay myself, but I am gonna pay myself when I was somebody with a subscription when I get to 250 subscribers. And and I'm like, I understand how that feels. Yeah. I really do that you're just you're putting sweat equity into the business. But it when you say first sign of problems, when we say first sign of problems, I think, well, okay, wait a minute. If you get hit by a bus tomorrow and this business, you want this business to continue, there's uh no one on earth that's gonna do what you do for free.

SPEAKER_01 33:21

Yeah.

SPEAKER_03 33:22

So there's a time when maybe you can put some sweat equity into it, but but you have to figure out if you're profitable if you had to pay someone to do what you do.

SPEAKER_00 33:34

Yeah, yeah, that's really important too. Yeah, I think the pay, I I just gave this illustration, it's a story. I was um, I don't know how many, I was still at my old space. So it was probably like 2007 or eight. I was pretty new to the boutique space. And we had this long 2,500 square feet downtown. So, you know, the long skinny spaces, like from front to back. Yeah. And I was working alone. So I had the front door open and then the way back far door open so I could unload. So I'm watching the front. Is anyone gonna come in? I'm unloading. It was a palette of shoes I was wearing. I used to wear high heels to work every day. So I'm wearing beautiful clothes, high heels, unloading a palette up and down because it's an alley, up and down these concrete steps, watching the door. And I remember thinking, I am done working for free. I am done. Everyone else gets paid. I am done. And so I paid myself, except on paper only. So then I started writing myself checks when I did payroll. I wrote myself a payroll check. And then I piled them up on my desk because I couldn't cash them. And my accountant, bookkeeper at the time, found out. And he said, Sierra, you can't do that. He's like, now you owe taxes on something you've never paid yourself for. I didn't know, Susan. I was like, I'm done working for free. I will pay myself, but I didn't figure out why I couldn't pay myself. I was just like, I'll just write the check. But the math problem hadn't been solved. Right. And I would say with that lady that you talked, or lady or gentleman you talked to, because I said this, you said this in your first business, like other people say this all the time. Well, when I get to this, I'll pay my she won't. She's not going to be worse. She won't do it. She's gonna get to 250 and there's gonna be more people to hire. And I'm saying that out of love because I did this too. I built a seven-figure business, a team of 12 people. It was always after the next hire, my day will come next quarter, next year, once we open another store. And I I never took a consistent paycheck in over 10 years. Okay, me for 20. Me for 20.

SPEAKER_03 35:34

Yeah, like I would say, oh, you know, I just draw money when I need it, which is true. I did. But then I also was the girl who many times got to the end of the year and owed tax and had to use our line, our personal to pay my income tax. So that would be another tip. Uh, right off the top, remember that all this money that you're bringing in is not yours. And you should, like good profit first people, you need to at bare minimum put aside a percentage for tax. Like what would you recommend that people you put aside for tax?

SPEAKER_00 36:10

So I tell, I mean, we want to get to 15%, but you can start at three, you can start at five, and it's off of gross margin. So it's not top line revenue. So if you have a $10,000 week, you don't pay, you don't take 3% of the $10,000, you would look at your $10,000 in sales, and then maybe it costs, you know, cost of goods was $5,000. So the $5,000 difference, that's what the 3% comes off of. That's really important for people to know. If they try to follow profit first, people will come and they're like, oh my goodness, I'm putting all this money in all these places because they're doing it off of top line, but it's off of margin if you're product-based business.

unknown 36:43

Yeah. Yeah.

SPEAKER_03 36:44

That's a good point. Thank you. Because I don't know that I would recognize that in somebody's numbers and do it. So that that is listen up, guys. It's only on your actual gross profit.

SPEAKER_01 36:55

Yeah.

SPEAKER_03 36:55

Um something else I was gonna ask you about.

SPEAKER_00 37:01

I can't remember. I think um we covered probably more than three money mistakes. I think that the so like not knowing your numbers, misjudging gross margin, and then I mean, I think creating sales goals and not profit goals, like building around a sales goal your business instead of an actual profit goal, and that's the math problem, right? It's the the sales minus cost of goods, gross margin minus operating expense. Okay, here's what I want to pay off my debt, to take a paycheck. Now I'm gonna back into it and decide what the sales goal should be. Then you have purpose too. Yeah, for sure.

SPEAKER_03 37:40

Then you know why you're doing this. Um, I for I remember what I couldn't remember, and I I was gonna share with you there is one big problem with what you recommended for the taking the three percent. And the big problem is there are a whole pile of people out there that don't run a PL every month, whose books are behind, who don't do it, who get it from their bookkeeper six months after the fact, like all of those things. And and that's just like when I first got a credit card a million years ago, the bill would come because there was no internet and I wouldn't open it. Yeah. It's the same thing. Yeah. Just because you're not looking at it doesn't mean exactly. Yeah. Yeah. So if I were thinking money mistakes, when I think about the people that I work with, number one, don't wait to get a monthly PL. Like that should be something like you should learn this first because then you have then you'll be more profitable earlier. Don't wait to um get a PL. Make sure you look at a PL. And if you have questions, ask. There are there are lots of communities out there where people will help you um with it. So don't wait. I would also say that you have to price uh accordingly to pay for labor that you are giving for free in your high heels on an alley. Yeah. Or in my case, left on a factory floor. Packing orders, you have to be able to do that. And my my third thing would be for sure that um that you have to understand that growth requires investment and it's not gonna get better when you hit 100,000. It's not gonna get better when you hit 500,000, it's gonna cost you whatever your cost of goods is to hit 500,000 and you're not getting that back. You're not getting that back. Yeah. And so my three things. It costs you money to grow your sales, so the sooner you're profitable, the better. But when you say, I want to level up from 50 to 100, you have to say, okay, it's gonna cost me $20,000 that I'm investing.

SPEAKER_01 39:52

Yeah.

SPEAKER_03 39:53

And it's coming out. Those would be my three things.

SPEAKER_00 39:56

Yeah.

SPEAKER_03 39:57

Where can people talk to you?

SPEAKER_00 39:59

Uh, probably my website's the easiest, Sierra Stockland.com. And you can just find me there. And there's lots of free, like you said, you don't have to do this alone. Like I have free blogs, I have free calculators, I have free workshops, I have my book is $9.99. Every single inventory-based business owner should read it. It's ten dollars. It's super easy, super simple. It walks you through exactly what we talked about today. So I think that's the best place to just get started and get some more info.

SPEAKER_03 40:26

What about you? Okay, wait a minute, friends. The book is called Inventory Genius.

SPEAKER_00 40:31

It is because I think everybody should be an inventory genius. You should know what's going on with your inventory genius. What? Is it just on Amazon or on your website too? It's on my it's on Amazon. Yep. And on Amazon, you can do Audible if you would like to listen. You can do Kindle, you can do the hard copy on Amazon.

SPEAKER_03 40:50

Inventory genius, and that is a great place to start for sure. And for me, I think you just come to my website to thesocial salesgirls.com. Uh get like you, we have freebies that they can um they can learn. Like for us, really, what we teach is we teach people how to get sales and create a business, you know, the business they were dreaming of when they were laying in bed when they couldn't sleep, thinking, oh, I can this. And so we teach you step by step. And so I would highly recommend that you just uh take advantage of one of the things that we offer on our site for free and start learning. And the same for you. Get that book and and follow. You have a podcast, I have a podcast. Yours is called Inventory Genius. Imagine that. And mine's called the East Roadmap. I can't wait to hang out with you next week.

SPEAKER_00 41:36

I know we can share some more battle scar stories and also what's going on with the numbers in our businesses and how we can help our people more.

SPEAKER_03 41:47

We're so nerdy, so so nerdy.

SPEAKER_00 41:50

But it's gonna be fun, and we'll have some bad food. We will have some bad food, some chocolate, and maybe watch a fun show.

SPEAKER_03 41:56

Yeah, sounds great. Okay. Um listen, thanks, thanks for listening. Go grab Sierra's book and come visit her website, come visit mine, and we're here to help you, really.

SPEAKER_00 42:07

Yeah, we are. Yeah, for sure. Take advantage of I love Susan's podcast. So I would say one thing you need to do is start listening to her podcast because you have a lot of really good bite-sized actionable steps on the podcast. So if you sell anything online, you need to follow the podcast. That would be my advice. Follow the podcast today. Put it on your list.

SPEAKER_03 42:26

Thank you. Can we say one more piece of advice? Yeah. Find yourself some good business friends. Yes.

SPEAKER_00 42:34

Yes, the people, and um, I'm gonna add to that people that you want to up level with. Yeah, don't surround yourself with complainers, gripers, and complainers, right? Not don't if you're I would say if you're brick and mortar, don't be in the room with everyone who's complaining about construction. Be in the room with people that said, here's what I here's how I problem solve, here's what my plans are, here's the smart person I talked to this week. Same thing for e-comm, right? Like you need to be in a room where you you're not the smartest person in the room so that you can level up. Yeah, yeah.

SPEAKER_03 43:04

It's uh like it's just a game changer to have some friends, right? It is, it is for I bet you four four years. Yeah, at least. Yeah. See you next week. All right, see you later. Bye.

SPEAKER_00 43:23

Hey friend, thank you so much for tuning in today to the Inventory Genius Podcast. If there's something that you heard today on the podcast episode and you want to dig deeper into becoming an inventory genius yourself, I want to invite you to head on over to my website, Sierra Stockland.com, where I have multiple ways that you and I can work together on your inventory. I want to help you with your profit, your cash flow, and your paycheck because at the end of the day, it's all related to your inventory. So head on over to the website, connect with me, I'll work with you soon. See you then. Hey, do your brand, your website, and your email marketing feel like three different things you're working on, none of which go together or create strategic growth. Then I would like to introduce you to my friend Cassidy at Simply Lens Creative. Cassidy helps product-based businesses bring all three of these things together, their brand, their website, and their email marketing, into one strategic growth tool for their product-based business. And here's what I appreciate about Cassidy. She comes from a retail family. In fact, her family still owns a brick and mortar retail store. So she genuinely gets the product-based world. Visit simply lenscreative.com and book a free strategy call with Cassidy. Chat with her about your brand, your website, and your email marketing, and see how she could maybe pull these things together for you so that you have one strategic growth tool for your business. SimplyLinsCreative.com, give Cassidy a call.