How to Be the CFO in Your Business

Podcast

Mar 10

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Being the CFO in your business goes far beyond bookeeping and accounting. Listen as guest expert Erinn Bridgmann shares specific and practical tips (including the five financial goals everyone should consider) to grow your wealth.

As a money management and mindset coach, Erinn Bridgman empowers female entrepreneurs to design a business that is not just ‘profitable’, but actually grows their personal wealth. Ever passionate about supporting women as they uncover their own potential and earning power, Erinn supports creative biz owners to approach numbers with a new power and to release judgment and fear around money in order to build true wealth.

Website //Instagram // Wealth Woman Checklist

The episode:

Katrina Widener: Hello everyone and welcome back to the Badass Business Squad podcast. I'm your host, Katrina Widener, and today I'm here with Erinn Bridgman. Thank you so much Erinn, for being here.

Erinn Bridgman: Yay. I am so excited. Thanks for having me. Let's talk about money!

Katrina Widener: Yes, yes! I think that we're going to have some really good information for everyone listening. We're going to be talking about how you can improve your personal wealth with your business and using that to fuel it, and really some super tangible, implementable things that you can do. So I think everyone's going to love this episode.

Before we dive into everything Erinn, if you wouldn't mind introducing yourself, I would really, appreciate it.

Erinn Bridgman: Yes! Well, thanks so much for having me on the show. I'm excited obviously for this topic and to talk about how we as women can leverage money in our lives. I am a Midwest girl based in Indianapolis, a mama of two perfect baby girls. I have a seven month old and a two and a half year old/ almost three year old, and I started my entrepreneurship journey as a wedding photographer back in 2012. And then started into business coaching in 2018-2019 and since then have really found this common theme that as creative entrepreneurs, we are incredibly talented at the skill we have. So being a photographer, being a web designer, being an event coordinator, whatever the case may be. But often, even as we've scaled to six figures, multiple six figures, the money side of things is sort of the skeleton in the closet that makes us not feel successful.

And so as I've worked over the years and I've also scaled my wealth through real estate, this is something that I am now able to coach women around, creative entrepreneurs around, and yeah help people make more money and make more money work for them. And so that's the work that I do now.

Katrina Widener: Perfect, I love it. And I'm like... for everyone who's listening, I was just sitting over here just like nodding my head. Nodding my head like, "Yes, yes." As a business coach, these are also things that I love and talk about. So definitely here for it. I know one of the things that you talk about is how to be the CFO in your business in ways that we don't even think about when we're first starting our business.

So I think that might be a great place to start is just like, what does that mean? What does that look like? How do we get involved in our businesses on the money side outside of just like tracking expenses and giving things over to my accountant?

Erinn Bridgman: Exactly, and I love that you said that. You brought in like the accountant piece. So I'm definitely a proponent of people having a bookkeeper, having an accountant. Those are definitely things that you can outsource and at a certain income level, business revenue level, you should be. Because that's not the best use of your time. But that does not mean that you can outsource being the CFO.

And I actually was just talking with a client today on Voxer and she was like feeling a little frustrated and like, "Do I need to like hire somebody different to be working with me in my finances? Do you need to just call me out?" And I was like, "Yo... yes, like it's frustrating that they missed a few payments and didn't collect those from clients, and that's definitely on her and we need to like make sure that is happening. But ultimately, the buck stops at you. You need to be the one assessing the data, looking at the numbers that they're inputting, making decisions based on those numbers, all of that." And so I say, you can never outsource being that CFO. So you need to be the one that is constantly analyzing the numbers, making decisions based on what you're seeing.

Many times as business owners, our numbers are present to past. So like a P and L sheet, balance sheet, that's all numbers that have already transpired. And then we're doing the things where we reconcile the transactions and... and blah, blah, blah, blah, blah. What I teach is that we need to have a 360 view of our money. So we need to be able, as business owners to see yes, the past, the present, and the future. Being the CFO means that we can analyze the data from the past, we can have accurate current data for right now, and that we're strategizing and making like decisions and moves future-oriented.

So we're creating projections inside of our company. We understand the cashflow of our business, like what is our bank account going to generally be three months from now based on revenue and expenses. And this is really, really important for us to be able to then bring the money into our personal world. Which happens through salary, and we can talk more about that.

But being the CFO means that you... I don't just care about your business numbers. In my work that I do, that 360 view? It's not just present, past, and future in your business but it's also in your personal world. So we need to make sure that we're strategizing our personal finances and we're having our business fund our personal financial goals.

And so you can't have somebody else telling you, you know, "What is your personal budget? What are your financial goals? What are those numbers? How are you going to get there? What's the pace?" Anything like that. Those are all decisions that you need to make and sit in the driver's seat of all those financial decisions.

Katrina Widener: That makes so much sense and I'm so glad that that's the way that you described it. Cause I think that a lot of people are just sitting there being like, "Oh yeah, oh! I probably haven't been doing that." I mean, I know that with the clients that I work with like sure, maybe they're looking at those past numbers. But how often are we really being proactive instead of reactive. Which is what I talk a lot about in my coaching, is how do we think ahead? How do we plan for the future so we're not just like catching things as they're thrown at us?

And I think that that really easily leads me into my next question. Which is just, when we are looking at numbers and we are strategizing for the future, what numbers should we actually be looking at?

Erinn Bridgman: Yeah. So when we think about your business side, so let's start with the business. Yes, we want a profitable company, and here's a couple of numbers. So people, a lot of times in the online space are talking about revenue. Like when they say like, "I'm a six figure entrepreneur, multi-six figure, I'm seven figure." All that stuff. That's validating that you have something people want and all that.

But what matters more is profit. But what matters even more in what I teach, is your salary. And I have found over the years that many women pay themselves the least, last, and inconsistently. And so they're going to make sure everything else is covered inside of the business. They'll kind of just make draws off their company like, "I really need the money, so I'm just going to like pull this out and just kind of make it work." They're not actually able to count on a salary from their company, and strategize how they're going to raise that salary and keep it consistent. And that piece is very, very important because first of all, it's the health of your company.

Many of us go into entrepreneurship for the time and the financial freedom. So taking the money and moving it from your business to your personal life happens through the salary piece. Inside of my money matrix system... so I have a whole spreadsheet, whole sort of system. The one piece I always emphasize is like, "This is the one cell that we're doing a lot of the strategizing in your business number is for!" Because that's the number that we then get to take and move over and put into our personal money mastery side of things, and that's where we get to then strategize all of your personal money, to then see like how do we work towards your personal financial goals.

So we need to understand your revenue. We need to understand your expenses. You need to be strategizing for monthly tax payments based upon the percentage you set aside every month for taxes. And then we need to be able to create your salary number and based on cash flow... so cash flow is like, end of the month beginning of the month, what is your bank account balance? And being able to forecast that out so that you can be like, "Yeah, I can definitely comfortably pay myself five grand, eight grand, whatever a month knowing like... oh, I have this large bill coming out in two months. But I can see the cash flow, and I can pay myself consistently." And many of us don't necessarily... you know, if you're in the wedding industry, if you're in certain industries like your income isn't consistent every month. But that doesn't mean you can't pay yourself consistently.

So that's what I would say. Is obviously like salary, salary, salary is like the biggest number. I've mentioned to others as well, because you can't know your salary without knowing those numbers inside of your business. And then on the personal side you need to be able to have a personal budget. 65% of Americans don't know how much they spend to live every month. And so I know when the word budget comes up that can make our skin crawl, that can make us feel really like stuck and stale. What I like to say is that budgeting is not about restriction, it's about knowledge.

And especially as an entrepreneur, we are the magic unicorns in the world that can just go make more money. So if you want to be able to spend that much money on restaurants or going out to eat, or having the house cleaner or whatever? I'm not telling you you can't do that, I'm just saying that the balance... the budget has to balance out. So go make more money if that's important for you and we have a negative budget. So you've gotta know what are you spending every month? This is knowledge to make decisions. If you feel like, "Oh my gosh, I feel like every month I can never catch up, and I'm always behind and don't even have money for the things I love." You're probably not realizing the bucket, like the leaks in your money and where they're going, and you need to be the one in charge, not your money.

So that's the first piece in the personal side is having your monthly spend. And then I strategize, we need to understand what is your annual short-term spending. This is stuff like Christmas and birthdays and travel and car maintenance, and things like that. That you don't necessarily pay for every month, but in a year's span you need a budget for. When people say, "I need to draw from my emergency fund for my tires on my car." I'm like, "That's not an emergency. Car repairs, tires, you need those and you should plan for those." And as wealthy women, we strategize for that. So that's the second piece of the personal is your annual short-term spending, and then we start to strategize your larger financial goals.

So just to recap, because I just said like kind of a lot... in the business side we're going to have a 360 view of our numbers. We're going to understand our revenue, our expenses, our tax payment, our profit, and most importantly, our salary. We're going to also understand our cash flow, so the bank account balance moving forward so that we can comfortably pay ourselves consistently. And then on the personal side, we're going to have a personal monthly budget. We're going to have our annual short term budget, like Christmas and birthdays and all the car maintenance and stuff like that. And then we're going to strategize for the financial goals.

Katrina Widener: Love it. Love it! I feel like that's super clear. I also really appreciate how you talked about it in terms of like, "We're using this as knowledge. We're making our money work for us instead of us being like beholden to our money." And I think that that's a huge thing for people to wrap their head around. I talk a lot about making your business work for you as opposed to working for your business. And this is that exact same idea it's just like one more way of doing that in your business and your personal life. Or vice versa, having your business work for you is one more way to have your money work for you and your business in personal life. So this makes complete sense and I hope that that gave people a lot of clarity.

I do want to talk about some practical things that people can dive into, like what they can get started on. "Okay, so this makes sense and this is inspiring, but what do I actually do?"

Erinn Bridgman: Yeah, and I know I can sometimes make people's eyes cross and things like that. So yeah, let's... let's make it real personal. Let me talk about the five financial goals that I teach on the personal side. Because I think that's like sort of the last component of the picture and then I can get real practical on "Here's some ways we can start." Okay, so the goal in growing our personal wealth is that we have to have access. We have to have extra money. If at the end of it all, your business pays you enough to live annually, then you're going to stay exactly where you're currently at financially.

Katrina Widener: Mm-hmm.

Erinn Bridgman: So whatever your current lifestyle is like, whatever that reality is, that's what we're going to like maintain. So the goal is to have excess, to have extra money. And we do that by either spending less or making more. And of course it needs to be a balance of both. But generally, since I speak and teach to entrepreneurs, I'm going to say, "I want you to spend most of your energy making more money, because that's like... we're going to like trip over dollars to save pennies here. You're going to like go unsubscribe from certain things and save yourself, you know, 50 bucks when you could just go like make you know another grand."

So... you know, responsibly if you're not using subscriptions, don't pay for them. Yeah! But I'm going to emphasize bringing in more money. So we need excess is the whole point of what I'm saying, and you need excess and you want to strategize your excess around these five financial goals. And this is all personal because we're talking about building your personal wealth through your business.

If you have debt, that is going to be one of the first things. And when I work with people one-on-one or when I work with them in my programs, we're going to strategize. Debt is heavy, money is emotional. Money is not just like data numbers. When Brett and I were first starting to get into real estate and into in investing, we would kind of get tripped up by this. It'd be like, "Oh, well we shouldn't pay off our last $20,000 student loan. Because the annualized rate of return if we put it into real estate, is better than just paying out the student debt." And it's like, "Just pay off the freaking loan!" Because I'm going to go to bed at night-

Katrina Widener: Mm-hmm.

Erinn Bridgman: Easier... with more ease and more freedom and more power and more possibility and opportunity because I don't have debt. Even though like data... like numbers wise maybe that's not the most strategic thing to do. Money is emotional, there's a psychological component of this that we have to bring in. So debt is one of the first things. It's heavy. There's a lot of shame around it. There's a lot of... yeah just feeling like you can't make a lot of moves or do a lot of things because of debt.

The second one is savings. And actually if you have debt, we need to strategize both of these a little bit simultaneously until you have a bit of a savings cushion. Otherwise if we spend it all towards debt and as soon as that one thing that you didn't budget for comes up, you are going to go right back into debt. So we kind of do both of those things together, and those two I do have an order to. Like if you're listening and you have those things then we need to tackle those things first.

The next three things I'm going to say are going to be kind of in order of value, where you're currently at in your life, what's important to you, that kind of thing. So the next one I'll talk about is lifestyle increases. So this could be in your actual like annual budget. And this is all... I always teach value-based. That's the whole thing that backs up money, is what are your values? You're just putting money behind your values.

So if your value is to travel the world and experience it, you need money to do that and we could increase your travel budget. Or if your value is like you want to have more time with your spouse or enrich your marriage, then maybe it's paying for more of a babysitter or more date money. Or to be able to go to a marriage conference or receive therapy or something like that. So you're going to choose your lifestyle upgrades all based on your values. And so I think that's a really important thing to really emphasize and something I love to talk about.

The fourth one is investing. So as entrepreneurs, we are not handed a retirement plan. We are the retirement plan, and so we want to be thinking about how do we currently cash flow our life? How do we increase our lifestyle? But then how do we make it so that in 70 years or when we're 70 or however old, we don't have to keep working if we don't want to. Right? Like, yeah you might love what you do, but like there's also a beauty and a freedom to like, "I can just do it because I love it. I don't have to do it." right? And so we need to be strategizing for retirement, so investing.

And then the last one I teach is generosity. So we know that statistically women are very altruistic with their money and the people that I know you and I attracted, are heart-centered women who want to make impact in the world. And so putting money behind impact and mission is the last financial goal. So hopefully that was like helpful to recap or to kind of like go into before we get into some of the practical stuff.

Katrina Widener: I think that that's super important and I'm glad that you brought that up. Because yeah, those five different categories, right? Debt, savings, the lifestyle upgrades, investing and generosity. I think that having those in mind when we go into, "What are the practical things, the tangible things that we're going to take action on?" It's exactly what we're talking about. It's being proactive. It's having intention and purpose in what we're doing, and making sure we know what our goals are is huge.

Erinn Bridgman: Yeah. So let me give like one very specific activity that I want your listeners to be able to do based on our conversation. There's so many things I could say! We could go into mindset practices, but we've been really focused on like a bit more of the masculine side of this, like numbers to know and how to organize and stuff like that.

So I always say piles of green cash are not very inspiring. Most of the time we make financial goals that are just like out of the air. "Just pick this number because I thought it sounded sexy or it's more than I did last year so that's good." But like honestly it's not inspiring. Like "I'm going to make $150,000 this year in my company because last year I made $97,000." What does $150,000 do for you? Why do you care about it? And all the work I do with people, we end up making more money. Because we're tying motivation to it. We're being proactive, we're creating plans. It's like, "Yeah, you'll make more money working with me for sure. But like..." Do you know what I mean?

So what I want people to do is to figure out what is... and this is airing in March, so... we've got three more quarters. We've got nine months left of this year. So I want you to decide what is your biggest financial goal of 2023? So you're going to decide what that is. What is the exact number you would have to achieve to get to that financial goal? So it's not a mystery. Like if you say you want to be debt free? And people want to work with me, "Oh, I got about $20,000 of debt." No, you don't, you rounded. What is the exact? "Oh, it's $21,350." I want you to know the exact number because now we have a very clear target you're working towards.

"I want to have savings." Okay. How much in savings, why did you come up with that number? "I want to travel more. I want to go on this vacation." How much will it cost your family to buy tickets to go to the resort, to have spending money, to be able to go on the excursions? What is the real number you're going for? And the importance of that in your psyche and your subconscious, all that is very important. But we're going to like just focus on, you're going to get that specific number.

Then I want you to figure out, "What would it feel like to achieve that financial goal?" So we actually do goals for how it makes us feel. So like if we set these goals and we don't have any attachment to them because we don't really like think about what that's going to do for us, it's not going to be as motivating. So if you think about like, "I'm going to take my family on this vacation." You do some research, you figure out all the costs of the vacation. What is it going to feel like to do that? Like take yourself, transport yourself into that future version of you. It's December of 2023. Okay, like you feel like the best mom in the world. You feel like you just gave your kids this incredible experience, you're beaming with joy. Like get into the feeling of it, and then kind of create a concise like, "I would feel like a mom giving my kids this experiential life that gives them deep joy." You know? Like I want you to kind of succinctly create it into a sentence.

Okay and then the last piece I want you to do is I want you to write this financial goal down in a space that you will see every day. So I want you to put the exact number, what it is, how it'll make you feel, and an affirmation statement that you believe that says like, "You will do it." So "I Erinn, I'm going to make $21,500 this year to pay off my debt so that I can have and live into being financially free." Or whatever it is, okay? Because our brain, and this is like a little bit like on the mindset side, but it needs repetition.

We've put on certain like thoughts and beliefs about money on repeat, for however old we are. And we want to work to program our brain to believe differently. You are going to make a financial wallet here that is different than something you've achieved. Because that's why you're making it as a goal. And so let's help our brains understand that it's possible, that it's totally safe to do. That we have the ability to achieve it. And so that's what I would love for your listeners to really practically do, and I'd love to hear in the dms what it is. The exact number, how you would feel, and what people are going for. It makes me so excited. So that's what I would love for your audience to do.

Katrina Widener: I love it. I love it! Thank you so much for sharing that. This is super exciting. I hope everyone listening goes and does that and dms you about it. So where can they find you? Right? We're talking about the dms. What direct message?

Erinn Bridgman: Instagram is my jam, so it's me. I run my Instagram. I'm the one posting the stories. I'm the one talking in the dms, so come talk to me in there. I love it, I love to hear the actual financial goals! And I'll probably give you some little nugget or some little coaching alongside of the goal to help you in your relationship with money. So come follow me on Instagram and let's be friends there.

Katrina Widener: What's your handle?

Erinn Bridgman: It's my name, so it's @erinn_bridgman. Bridgman, no E on the bridge. Yeah, I'm sure you'll put in the show notes.

Katrina Widener: Yes I will, I'll put in the show notes. It'll be on the full blog on the website. It'll be there. I also want to note for everyone listening that Erinn has a wealthy woman checklist that you should check out as well. So if you're looking for more assistance, Erinn is here for you!

Erinn Bridgman: Yes! And that checklist is super... this can be a really great structure for you. It's breaking down what do you need to know to be the CFO of your business numbers, of your personal numbers, and of your money mindset. And like I've had people like literally like printed out and like have a money meeting with their partner. Like we're going to figure this out! Or it's going to help you like set up some financial meetings for yourself. So seriously, go and download it. It's very valuable and it will really help you in your journey.

Katrina Widener: I love it! Thank you so much, Erinn for coming on today. I appreciate it and I think everyone is going to get a lot outta this episode.

Erinn Bridgman: Yes. Cheers to more wealthy women in the world.

Katrina Widener: Yes, I am here for that!